Zynga, the largest social gaming company, has raised an additional $15m in funding, in yet another sign that this nascent industry has quickly become big business in the Valley.
The San Francisco company, which operates games on Facebook, MySpace, and Apple devices, has attracted nearly 200m monthly users to its games.
And it’s figured out how to make money from these users through virtual goods, advertising and offers. Outside estimates put Zynga’s revenues at between $150m and $200m for the year.
Zynga previously raised $40m in two rounds last year. The company would not disclose who was behind the latest investment.
The round comes on the heels of Electronic Arts’ acquisition of Playfish, which is Zynga’s nearest competitor, and a funding round for Playdom, the third largest social gaming company. Even RockYou, one of the older application developers that is not developing social games, is getting in on the action — it raised a huge round yesterday.
Venture capitalists are throwing money at these companies, and not without good reason. As Facebook’s audience eclipses 350m and heads towards the half-billion-users mark, even small developers have a chance to reach an enormous audience. And even if just a fraction of these users pay for virtual goods, there is the potential for real windfalls.
Analysts expect the company to go public next year, and Zynga certainly isn’t doing anything to suggest otherwise. Quite the contrary, in fact.
Along the 101 freeway, which connects San Francisco and Silicon Valley, Zynga recently erected a massive billboard. There is no text on the sign — not the name of any games, or even the company. Rather, it is just the Zynga logo — the white profile of a dog against a red background.
Though most people, and probably even many in the tech industry, won’t recognize the logo, Zynga seems to be betting that sooner, rather than later, they will.
