Over $350M invested into social games, VWs, casual MMOs & games

Tracking VC funding deals is a great way to keep a pulse on what’s considered HOT in any given market. VCs start investing when the market starts showing real promise – for major profits in 4-7 year time horizon. As a rule of thumb, VCs are looking for deals where they could make 10x their original investment. So, if there is a number of VCs investing into a segment, you can be sure it is HOT.

Everyplay’s market segment is the mix of  social games, virtual worlds, casual MMO and casual games. space. Tracking the VC deals shows continued validation for this market, which what you would expect when the user figures continue to grow very rapidly. Everyplay is also likely to seek out VC funding eventually, so it is important to us to know which VCs are active, what kind of deals are happening and how much money is being raised.

The table shown below is compiled from my own research into these VC deals. It is by no means 100% comprehensive. First caveat: it is rather US focused as the PR machine works best there. VentureBeat, Virtual Worlds Management and the usual suspects TechCrunch, GigaOm, ReadWriteWeb and Mashable do a good job in covering these deals. As Europe is almost completely under-represented and a lot of early stage deals don’t get publicized at all (regardless of where they happen), I’m sure I’m missing a whole of VC deals from this list.

When interpreting the top line figure of $350 million, you should note that half of it was invested into two companies: 9You ($100 million) and Big Fish Games ($87 million). Regardless, it is clear that the VC activity in this space is constant at a roughly “2-5$ million invested a week” level.

The deals

Venture capital funding for social games, virtual world, casual MMO and casual games. Updated 21th Sep 2009.

Date Company Invested Type Series Country Lead investor
Sep-08 Challenge Games
$10,0
Social games Series B USA Globespan Capital Partners
Sep-08 Big Fish Games
$83,0
Casual games Series A USA Balderton Capital
Sep-08 Hollywood Interactive
$5,0
Social games Unknown USA BlueRun Ventures
Sep-08 RobotGalaxy
$5,0
Virtual World Series B USA Bachmann Industries
Aug-08 Nonoba
1,3 €
Casual games Series A DK Mangrove Capital Partners
Aug-08 LOLapps
$4,5
Social apps Series A USA Polaris Venture Partners
Aug-08 Webcarrz
$4,0
Social games Series A USA Meakem Becker Venture Capital
Aug-08 Knowledge Adventure
$5,0
Virtual World Unknown USA Azure Capital Partners
Aug-08 Dizzywood
$1,0
Virtual World Series B USA European Founders Fund
Jul-08 Challenge Games
$4,5
Social games Series A USA Sequoia Capital
Jul-08 Zynga
$29,0
Social games Series B USA Kleiner Perkins
Jul-08 Playfish
$1,0
Social games Bridge UK Accel Partners
Jul-08 Gaia Interactive
$11,0
Casual MMO Series C USA Institutional Venture Partners
Jul-08 Six Degrees Games
$7,0
Virtual World Series A USA Prism VentureWorks & Clearstone
Jul-08 Social Gaming Network
$3,0
Social games Unknown USA Jeff Bezos Expeditions
Jul-08 Riot Games
$7,0
Casual games Unknown USA Benchmark Capital
Jul-08 8D World
$1,0
Casual MMO Series A USA Spark Capital
Jun-08 I’m in like with you
$1,5
Social games Series B USA Spark Capital
May-08 Social Gaming Network
$15,0
Social games Series A USA Greylock Partners
Apr-08 Serious Business Inc
$4,0
Social games Series A USA Lightspeed Ventures
Apr-08 Kongregate
$3,0
Casual games Series B USA Jeff Bezos Expeditions
Apr-08 Akoha
$2,0
Mixed reality social game Seed USA Multiple angels
?.2008 Playfish
$3,0
Social games Seed UK Accel Partners
?.2008 RobotGalaxy
$7,0
Virtual World Series A USA Bachmann Industries
?.2008 Hangout Industries
$6,0
Virtual World Series A USA Polaris Venture Partners & Highland Capital Partners
Q1/2008 9You
$100,0
Virtual World/Casual Games Unknown China Temasek Holdings
Q1/2008 Chapatiz
$0,5
Virtual World Seed French Angel Investors
Q1/2008 Dizzywood
$1,0
Virtual World Series A USA Shelby Bonnie
Q1/2008 EveryScape
$7,0
Mirror World Series B USA Dace Ventures
Q1/2008 Fluid Entertainment
$3,2
Virtual World Series A USA Trinity Ventures
Q1/2008 Handipoints
$0,8
Virtual World Seed USA Charles River Ventures
Q1/2008 Metaversum
several m€
Mirror World Unknown USA Balderton Capital
Q1/2008 Numedeon
$1,0
Portfolio of Virtual Worlds Series B USA BankInter’s Venture Capitol Group
Q1/2008 Sparkplay Media
$4,3
Casual MMO Series A USA Redpoint Ventures & Prism VentureWorks
Mar-08 Alamofire
$2,0
Social games Series A USA Founder’s fund
Mar-08 PopJax
$4,7
Social games Series A USA Draper Fisher Jurvetson
Feb-08 Flowplay
$3,7
Hybrid MMO / casual games Series A USA Intel Capital
Feb-08 RocketOn
$5,0
Social Games Series A USA D.E. Shaw Group
Jan-08 Zynga
$10,0
Social games Series A USA Union Square Ventures
Jan-08 Rebel Monkey
$1,0
Casual MMO Series A USA Redpoint Ventures
Dec-07 Playfirst
$16,5
Casual games Series C USA DCM
Nov-07 Apaja Online
1,7 €
Casual games Series A Finland Martinson Trigon Venture Partners
Oct-07 GameLayers
$0,5
Social games Series A USA O’Reilly Alphatech Ventures
Sep-07 Watercooler
$4,0
Social games Series A USA Canaan partners
Sep-07 RocketOn
$0,8
Social Games Seed USA Unknown
Aug-07 Kongregate
$5,0
Casual games Series A USA Greylock Partners
Aug-07 D2C
$6,0
Casual games Series A USA Rubicon Ventures
Aug-07 Conduit Labs
$5,5
Social games Series A USA Charles River Ventures & Prism VentureWorks
Jul-07 Three Rings
$3,5
Hybrid MMO / casual games Series B
USA True Ventures
Mar-07 Flowplay
$0,5
Hybrid MMO / casual games Seed USA Angels
Mar-07 Gaia Interactive
$12,0
Casual MMO Series B USA Benchmark Capital
Dec-06 Metaplace
$5,0
Casual MMO platform Series A USA Charles River Ventures
Dec-06 D2C
$1,5
Casual games Seed USA Rubicon Ventures
Jul-06 Sulake
6 €
Virtual World Series C? Finland Movida Group
?.2006 WeeWorld
$15,5
Virtual World Series B UK Accel Partners
Jan-05 Big Fish Games
$8,7
Casual games Angels USA Multiple angels, two rounds
Jan-05 Sulake
18 €
Virtual World Series B? Finland Benchmark Capital
?.2005 WeeWorld
$5,5
Virtual World Series A UK Benchmark Capital
2000 – 2004 Sulake
? €
Virtual World Seed to Series A Finland 3i, Elisa & Taivas

Notes and commentary

  • Charles River Ventures spoke prominently for this segment, especially their partner Susan Wu did a lot to promote the segment in year 2007.  Susan left CRV earlier in 2008 to join Ohai, a stealth online gaming company, and CRV’s public profile has been a lot more quiet since.
  • Lightspeed Venture Partners is active and very prominent thanks to their partner Jeremy Liew, who has probably one of the best blogs about this segment.
  • SGN and Zynga are locked in a deadmatch to own the social games space. Good for companies looking to be acquired.
  • EDIT (2008-09-25): I originally reported Sulake‘s investment as 22 M€, which was from Kauppalehti, the leading Finnish business magazine, who had calculated the total losses incurred by Sulake from its founding in year 2000 to end of year 2007 using public records. The Series B and C rounds already amount to 24 M€, and the Seed – Series A is definitely several million euros, so it wouldn’t be a big leap to guess that the total investment would be around 30 M€
  • EDIT (2008-09-24): I mistakenly reported a series B for Apaja‘s, which hasn’t happened. The table above has been corrected.
  • EDIT 2 (2008-09-25): Corrected funding for Akoha to 2 M$, corrected lead investor for SGN’s 15 M$ round to be Greylock Partners
  • EDIT 3 (2008-09-25): Corrected funding for Conduit to 5,5 M$, corrected Sulake’s founding rounds, added Hangout industries, added investors for Conduit, Sparkplay and Six Degrees, corrected Metaplace’s funding date to Dec-06.
  • I’ve omitted skill gaming, pureplay publishers/operators, core gaming (e.g. like Trion World Network, which has raised over $100 million), middleware and other related industries to try to focus on developers and self-publishing companies.
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28 Comments on “Over $350M invested into social games, VWs, casual MMOs & games”

  1. Austin Hill Says:

    Hi Jussi,

    Great chart and thanks for including Akoha on the list. Small correction, we have actually only raised $2.0 million for Akoha not the $3 million listed.

    Also we aren’t developing a virtual world, but rather a reality based social game played in the real world.

    Thanks for the great list and post.

  2. jeremyliew Says:

    Thanks Jussil for the kind words.

    Note that although we think the SGN guys are terrific, Lightspeed did not invest in them, Greylock did.

    Cheers

    J


  3. […] Jussi Laakkonen also notes from the same source: Sulake’s 22 M€ [of investment from 3i] is [quoted] from Kauppalehti, the leading Finnish business magazine, which calculated the total losses incurred by Sulake from its founding in year 2000 to end of year 2007 using public records. VC money raised is more than this. […]

  4. jussilaakkonen Says:

    Austin & Jeremy,

    many thanks for the corrections! I’ve edited the table and included the edit on the notes.

    Austin, I really enjoyed your TechCrunch pitch. I love ambitious projects and yours is not only ambitious but also noble. Best of luck with it!


  5. […] Laakkonen of social gaming stealth startup Everyplay has a great post tracking investment in the social games and virtual worlds space.  The simple message – there […]

  6. Nabeel Hyatt Says:

    Thanks for doing the research! Couple of corrections/additions that I noticed:
    – Conduit Labs raised $5.5m, not $5m. And it was a split round between Charles River Ventures and Prism VentureWorks
    – Sparkplay was a Redpoint & Prism VentureWorks deal.
    – The puts Prism VentureWorks with the same # of deals in the space as CRV and more than Lightspeed.
    – Six Degrees had Clearstone in as a major investor (maybe majority) as well
    – Hangout Industries is missing.. Highland & Polaris invested, Virtual World thing

    hmm.. that’s all I got right now. :)

  7. jussilaakkonen Says:

    Nabeel, many thanks for the corrections. I’ve now included them on the table above.

  8. Daniel James Says:

    Three Rings’ round led by True was a Series B.

    Great table!


  9. Daniel, thanks for the correction!


  10. Great list Jussi!

    I’d like to add two interesting girl gaming related investments:

    Stardoll.com – Index Ventures – $4m – Feb 06
    WatAgame (gosupermodel.com) – Accel Partners – $4m – Jul 07

    I’ll send you some more later :)

  11. Kevin Chou Says:

    While we don’t necessarily think of ourselves as a gaming company, it’s nice to be included! Nice work.

    I would also add to your list Outspark, who raised $11MM from DCM and Tencent in Jan ’08.


  12. Kevin, if I understand correctly, Outspark is a pureplay operator, that brings over Korean casual MMOs for the US market. With this list I wanted to focus on companies that self-publish (develop and publish/operate) titles. The definition is somewhat blurry though.

    Joakim, I’ll add those two to the list shortly.

  13. alexis bonte Says:

    Hi Jussi,

    Good list. Erepublik.com also raised 550,000€ in an angel round in June 2008. For full details:http://www.erepublik.com/inmedia.html

    tks

    A


  14. […] In case you had not noticed, there is an avalanche of deals this year around the social gaming and virtual world’s area. Some recent investment rounds like the Big Fish Games one are very large (83 million $). Fellow entrepreneur Jussi Laakkonen did a list of a lot of the deals on his blog here. […]


  15. […] this months sales figures (the usual corporate and business need), but can we grow this over time. Jussi Laakkonen blogs about the US$350M invested in VW’s, Social Media here. It is correctly pointed out that much of the list is US based. One of the reasons we started […]


  16. […] posted an excellent writeup of how there’s been over $350 million invested in social games etc worldwide, and commented that he the European side wasn’t really included in his […]

  17. Adam Says:

    You inspired me to dig out, clean up, and re-format my own compiled data and split out the EU-only investments.

    I’ve cloned your presentation format (almost – I hadn’t recorded which VC firms had done each investment) for clarity – http://t-machine.org/index.php/2008/09/30/over-150m-invested-in-europe-into-social-games-vws-casual-mmos-games/


  18. […] Laakkonen compiled a list of VCs investing over $350M invested into social games, VWs, casual MMOs & games which gives a nice insight of what's happening there. Adam from T-machine tried the same thing […]

  19. Jim Says:

    Nice list! What’s with the math, though? By my quick count you’re showing more than US$480M+ total. (Not including anything from Adam’s link — some of which may be double counts). 9You & Big Fish are still a big part, but more like 40% of total.


  20. Jim, the list is not nearly comprehensive and there are most likely rounding errors in many places as well as misreported figures (some fundings are reported differently by different news outlets), so I gravitated towards round numbers to emphasize that these figures are approximates not 100% accurate.


  21. […] Over $350M invested into social games, virtual worlds, casual MMOs and games […]


  22. […] Tracking VC funding deals is a way to determine what’s considered hot in a given market. VC firms try to predict where they can make profits and start investing when the market starts showing real promise for major profits in 4-7 years. Recently, venture capital funding for social games, virtual worlds, casual MMO and casual games increased considerably, in Europe and the world. […]


  23. […] a month ago I published a list of $350 million invested in year 2008 into virtual worlds, casual MMOs, and casual & social games. The blog post got a […]


  24. […] the sector in which my company Everyplay operates. My earlier post on this sector was titled “$350 million invested this year“, and with latest data that figure needs to be upped to $481 […]


  25. […] is the sector in which my company Everyplay operates. My earlier post on this sector was titled “$350 million invested this year“, and with latest data that figure needs to be upped to $481 […]


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