The company hopes to restore trust in the market after a scandal involving deceptive offer ads

Dec 2, 2009 13:11 GMT  ·  By
gWallet hopes to restore trust in the market after a scandal involving deceptive offer ads
   gWallet hopes to restore trust in the market after a scandal involving deceptive offer ads

Advertising as a way of earning virtual currency credits, popular with many social gaming companies, is about to get a second chance after the practice came under heavy fire as a result of the less-than-ethical methods some advertisers employed. A new company that is now looking to fill in the gap and restore trust in the system, gWallet, has managed to raise $10.5 million from a couple of venture capital investment firms.

gWallet was founded by Gurbaksh Chahal, an entrepreneur with a very good track record in the space. He founded his first advertising company, ClickAgents, at 16 and later sold it for $40 million to ValueClick. He then went on to launch BlueLithium, a behavioral advertising firm, which he sold for a hefty $300 million to Yahoo.

Now, his attention is focused on gWallet, which already has several customers despite being launched this past August, and he says the funding will be used to support the company's international expansion. The startup has raised $12.5 million so far and the latest funding comes from Adams Street Partners and Trinity Ventures.

Social gaming is becoming big business really fast thanks to huge growth and smart use of virtual currencies and in-game transactions. The virtual goods and currency market is set to be worth well north of $500 million this year and is expected to reach $2 billion in three years. Virtual goods offer an alternative for players wanting to get ahead without investing serious amounts of time in the game, by allowing them to pay for various items using the game's virtual currency.

Players could pay cash in exchange for the credits or they could opt to get various 'offer' ads to earn currency. This is where things got muddy as many of these offers were tricking users into expensive but hidden monthly subscriptions and used various other deceptive tactics to get into their wallets. It all blew over soon enough and the aftermath is still being felt in the industry. gWallet offers pretty much the same service but with the guarantee that all the ads are from legitimate, well-known advertisers, something the market desperately needs at this point. The company will work directly with the advertisers and has a dedicated sales team to ensure they get only quality clients. gWallet also wants to help the advertisers and the gaming companies come up with offers that actually work and are useful to the users, while at the same time generating revenue for all the parties involved. If it can pull it off, it could mean access to one of the fastest growing markets, one that is bound to move big amounts of money in the coming years.