This is the first round of funding by Ozone Media which intends to use the fund in increasing the number of its partner websites and strengthen its marketing strategy, sources close to the development told Business Standard.

On being asked Kiran Gopinath, the CEO, Ozone confirmed the investment. He however declined to comment on the quantum of the investment.

Sources in IDG Ventures India confirmed the report although an official spokesperson said they do not comment on speculations regarding the investment.

Ozone Media is the second venture of Kiran Gopinath, who had earlier set up Webshastra, also an Internet advertising company in 2000 along with two other persons. Webshastra which was funded by Erasmic Consulting was successfully sold to Position2, a Silicon Valley-based search engine marketing firm in 2006.

Ozone has over 100 network websites as its partners in a revenue sharing model. The company also claims more than 40 clients including companies across diverse sectors such as HSBC, SBI, Yahoo!, Lenovo, Cleartrip and Citibank. The company grew by 150 per cent in the previous fiscal, said Gopinath.

IDG Ventures has so far invested in eight companies in India. IDG Venture's portfolio in India includes 3D Solid Compression, Kreeda, Aujas Networks, Manthan Systems, ConnectM, Perfint and iViz. Earlier speaking to Business Standard, C Meenakshisundaram, managing director, IDG Ventures India said that the company was looking at investing up to $5 million in companies in Internet and mobile payment space in India.

"Many interesting start-ups have come up in the mobile payment space during the last one year. While some of them have already enjoyed the first round of funding, some are looking at the next round. We have seen about 7-8 companies both in Internet and mobile payment space, and can invest up to $5 million," he said.

Estimates made by different analyst firms have put the Internet advertising market in India in the range of Rs 250-400 crore.

According to Lintas media report, Internet advertising in India is expected to grow to Rs 2500 crore by 2011.

Over the years, a number of Ad network companies have started their operations in India. Some of these companies including Sulekha, Tyroo, Media Estate, IndiAds and AdsForIndians are really gearing up to the tap the market opportunities here.

Besides, the emergence of a host of portals targeting the local online advertising market will also see this sector drawing the attention of global venture capital funds in days to come, according to industry sources.