Casual gaming on the web must look like quite an attractive market to VCs right now. Jeff Bezos already invested in two casual gaming companies this year, Kongregate and SGN, after SGN had already raised a $15 million Series A round in January. Now, Mark Pincus’ Zynga, another online gaming site, announced that it raised $29 million in a Series B round led by Kleiner Perkins. Zynga also announced the acquisition of YooVille, a virtual world application for Facebook.
Zynga had raised a $10 million Series A round in January, led by Union Square Ventures.
Zynga is quite similar to SGN, in that both companies mostly focus on games for social networks. Kongregate takes a different approach and makes its games available on its own site only. While this makes playing a game as simple as going to the Kongregate homepage, it also means that Kongregate doesn’t have a built-in word-of-mouth marketing network to profit from.
With almost $40 million in money raised, Zynga and its VCs must be looking for a very high valuation for the company. Its main income sources are advertising and selling virtual goods to its players.
It’s probably worth speculating that Zynga is going to use quite a lot of this venture money to branch out of the social networks games market and start developing for other platforms (such as cell phones) as well.
