Indian ad tech startup Adyar has signed a deal with the government of India to provide a Rs. 500 crore digital ad spending subsidy to ad tech firms, it has announced.
The move follows a proposal from the government earlier this month to make Adyars digital ad budgets available for the first time.
Adyaris Chief Executive Officer Deepak Bhattacharya said the digital ad subsidy was expected to be around Rs.1,200 crore, which would help ad tech companies expand their advertising footprint in India.
Adyar, which was formed in 2016, is one of the first ad tech startups to be incorporated into the Indian market, after Flipkart.
The company has received over $500 million from private investors in the past three years, according to the latest filings from the Registrar of Companies (RoC).
Bhattachary said the move was aimed at ensuring that Indian tech companies get their due share of the funding.
“Our goal is to help Indian companies get an adequate funding for their ad tech and build a robust ecosystem in India,” he said in a statement.
“It is important to note that the digital subsidy is being allocated by the government to adtech firms, so they are receiving a subsidy to help them grow their ad spending.
We look forward to working with the authorities in India and beyond to accelerate this process.”
Bhattay said the Digital Ad Scheme will also allow companies to monetize the ad revenue that adtech companies earn from their ad platforms through a “single revenue stream.”
The Digital Ad subsidy will be available to ad startups, including those that use Adyarpark platform, adtechs, and ecommerce platforms, he said.
Bhattakarya said that Adyaro had received $100 million from the US venture capital firm Andreessen Horowitz in 2016 for an initial round of funding of $150 million.
“The Government of India is committed to the ad tech ecosystem in the country and to working to make the digital economy viable for the masses,” he added.
“We look forward, with the help of our friends at Adyark, to working closely with our friends from Flipkand, Snapdeal, etc to make this happen.”
In December, India’s government approved a Digital Ad Policy Framework (DAPF) that would make it easier for companies to raise funding.
This was a step towards allowing digital ad spend to be available for India’s tech startups.
In February, the government set a deadline of January 2019 for the rollout of the DAPF.