Thinglink, a Finnish product tagging startup based in Helsinki/Palo Alto (see our previous coverage), has just announced it has raised USD 1 million in funding from Nordic Inventure and Lifeline Ventures. The funding will be used to develop in-image product advertising network for brands, retailers and other product advertisers. The firm’s reference customers include the Scandinavian media house Aller, the Finnish Broadcasting Company YLE (Wenzel’s Antique Road Show), and interior design brand Artek.

One might suspect it was not too hard to convince the investors this time, as the driving forces behind the firm are Ulla-Maaria Engeström and her husband Jyri Engeström (co-founder of Twitter’s competitor Jaiku, which Google acquired), while Lifeline Ventures, on the other hand, was founded by Petteri Koponen, also Jaiku co-founder.

This is how Thinglink describes the episode in the company blog:

It all came together when we moved to our new offices on Korkeavuorenkatu. It’s a great location in Helsinki, conveniently above an awesome internet agency Valve, and coincidentally in the same space where we operated Jaiku (and Thinglink) back in 2007. I think it was the space that got Petteri Koponen … in a sentimental mood, so he invested in Thinglink. As it happens, on the top floor there is another venture capital firm called Inventure that also believes in the growth of in-image advertising.

Thinglink has evolved over time from design enthusiasts’ social network to tagging products in images websites or blogs. With Thinglink, it is possible to tag any image on the web and share them on social networks. The the original image source receives the traffic back regardless of the publisher, brands, or bloggers who distribute the tagged images.

Thinglink offers currently online publishers a tool for engaging their viewers through interactive images. It is possible to make objects in images clickable (like in the picture above) using Thinglink to drive traffic from the images to e.g. e-commerce sites. Thinglink mentions that according to the New York Times, users are 5-15 times more likely to click on tagged images compared to other web ads. Thus tagged images make for very good marketing and traffic generation tool. You can read our previous article for a more thorough description of the service.