See the original story in Japanese.

The round in the title was updated based on the claim from App-CM (May 13th, 2016).

Tokyo-based App-CM, the Japanese startup developing in-line video ads platform for smartphones, today announced that it has secured about $140 million yen (about $1.2 million) from Yeahmobi and several angel investors in a series A seed round. Yeahmobi is one of the world’s largest ad networks based out of China.

App-CM was founded by Atsufumi Otsuka whom we previously introduced in our story about mobile video-viewing app Vimet. After launching App-CM, Otsuka handed over the management of Emet Creation, which developed the Vimet app, to So Yanagimoto, president and representative director of Emet, so he could devote himself to developing a video player engine for mobile at App-CM.

Typical video ad networks for mobile use the CSS Sprites format to display in-line ads in a mobile web browser. The format makes sense in terms of allowing users to stay in a web browser while viewing video ads without switching to other video viewer apps. However, it displays a video clip consisting of independent still images in a manner similar to playing a flip book animation, its data volume being typically larger than that of QuickTime or MPEG video format because frame-to-frame delta compression is not applied.

To address this issue, App-CM has developed an original video format based on VP9, an open-source video compression codec originally developed by Google. Corresponding to in-stream video ads protocol VAST, the new format enables compression of up to one-tenth to one-twentieth in data volume compared to typical formats which are conventionally used for mobile video ad networks. During the first launch, a video viewing plug-in compatible to the App-CM format will be installed on a viewer’s mobile web browser. A video clip, which typically weighs 4 megabytes on average in a conventional video format, can be compressed down to 200 kilobytes while the compression efficiency depends on how many frames are sub-sampled out of 30 frames per second in the typical NTSC video format (see the video below).

Having been adopted on over 200 mobile media websites in Japan, App-CM leverages its unique video-player technology without requiring a large data traffic, planning to expand to emerging markets where mobile broadband is available on an uncertain basis. In addition to the expansion into the Chinese market in cooperation with Yeahmobi, App-CM will be in a hurry to expand into the Indian market based on a partnership with Green House Ventures (GHV), the Indian local startup accelerator that the mobile video company partnered with last month.

Represented by CTO Miki Yagita, many students from Graduate School of Information Science and Technology, the University of Tokyo, has joined the engineering team to develop the App-CM platform. In order to strengthen the engineering resources, App-CM recently relocated its headquarters to opposite the Red Gate (aka Akamon) of the University of Tokyo. They are currently applying for a patent on their AI-powered optimized ad distribution algorithm and mobile video player engine.

Edited by “Tex” Pomeroy