Safeguard Scientifics, Inc. (NYSE: SFE), a holding company that builds value in growth-stage life sciences and technology companies, today announced it led a

for Spongecell, Inc., a New York City-based advertising technology company that turns standard banner ads into dynamic ads with rich media features. Proceeds will be used to fund Spongecell’s continued expansion including product development, sales and marketing, executive and staff recruitment, and other working capital needs.

“Spongecell is leading the creative resurgence of online display advertising, transforming standard banner ads into lightweight ads with a rich media experience that can run in any ad placement on the web with our simple, fast, cost-effective and audience-effective solutions”

“The display advertising market―the segment in which Spongecell primarily competes today―is expected to grow to $27.6 billion in 2016, a CAGR of 20% from 2011,” said Peter J. Boni, President and CEO of Safeguard. “While overall ad budgets are shrinking, allocations of those budgets are being shifted from offline to online as agencies focus on media that is more efficient, targeted, measurable and proven to demonstrate ROI. An Expansion Stage company, Spongecell is taking advantage of this trend, and as a result, ranked #76 on the 2011 Inc. 500 List.”

Spongecell turns online banner ads into dynamic ads with rich media features, increasing engagement rates by 25 to 50 percent versus static banner ads. Spongecell delivers creative flexibility, accelerated production timelines and cost-effective execution through its superior online display advertising platform. Spongecell’s enhancements give creative agencies full control to design and create more engaging banners ads. Spongecell’s interactive features, like video, social media, interactive maps, carousels, and downloadable/SMS coupons, are easily integrated without disrupting the creative workflow. In addition, Spongecell allows companies to collect data and analytics that provide a detailed portrait of audiences that can’t be produced in other advertising platforms.

“Spongecell is leading the creative resurgence of online display advertising, transforming standard banner ads into lightweight ads with a rich media experience that can run in any ad placement on the web with our simple, fast, cost-effective and audience-effective solutions,” said Ben Kartzman, CEO of Spongecell. “In order to support our growth within this fast-moving marketplace, we looked for a partner that offered us more than just capital―we found that in Safeguard. A combination of Safeguard’s advisory board, syndication partners and expertise in successfully scaling businesses across a diverse spectrum of industries make them the ideal partner. This will prove invaluable as we look to expand our ad offerings domestically as well as internationally across emerging ad platforms such as pre-roll video, mobile, tablet and other connected devices.”

“Engagement around static banner ads has been in steady decline in recent years,” said Erik B. Rasmussen, Managing Director in the Technology Group at Safeguard, who joined Spongecell’s Board of Directors. “Because of this, advertisers and publishers alike are looking for ways to increase engagement and ultimately drive results for their campaigns. With this in mind, we surveyed the market landscape and discovered that Spongecell was already driving amazing results through its leading-edge platform, and had put together a solid roster of clients such as HP, Dell, Proctor & Gamble, Volvo, Dodge, Comcast, Kraft, IBM. In addition, Spongecell is led by an experienced team that cares about its clients and delivering superior results. We are pleased to welcome Spongecell to the Safeguard family of innovative companies.”

Spongecell has previously raised capital from industry luminaries such as Eric Schmidt, Google’s Executive Chairman; James Pallotta, Chairman of Raptor Capital; and Bob Pittman’s Pilot Group.

About Safeguard Scientifics

Founded in 1953 and based in Wayne, PA, Safeguard Scientifics, Inc. (NYSE: SFE) provides growth capital for entrepreneurial and innovative life sciences and technology companies. Safeguard targets life sciences companies in Molecular and Point-of-Care Diagnostics, Medical Devices, Regenerative Medicine, Specialty Pharmaceuticals and selected healthcare services, and technology companies in Internet / New Media, Financial Services IT, Healthcare IT and selected business services with capital requirements of up to $25 million. Safeguard participates in expansion financings, corporate spin-outs, management buyouts, recapitalizations, industry consolidations and early-stage financings. For more information, please visit our website at www.safeguard.com, our blog at blog.safeguard.com, download our web app at app.safeguard.com, or you can follow us on Twitter (twitter.safeguard.com), LinkedIn (linkedin.safeguard.com), and YouTube (youtube.safeguard.com).