Brief market overview
According to several market reports, Virtual commerce is a $2.2 billion industry today and is expected to grow to $6 billion in less than 5 years. Although most of the virtual spending happens on social gaming sites these days, we can’t forget that traditional MMO’s and Virtual Worlds have led the revolution and still account for a large part of that pie.
One of the main reasons this shift has happened in the first place (and if not the only reason) is that one of the leading social networks decided to open up its platforms to third parties in 2007. As a result, the past two years, Facebook has seen the explosion of a very large virtual currency and payment ecosystem.
Building a universal payment platform that can manage a universal virtual currency is a huge task, and the number of people interested in monetizing Facebookâs 350+ million users is booming. It’s because of the growing number of social apps and games using virtual economies that we are seeing an exponential growth in the number of companies helping those developers to monetize their apps. With the help of these so called Virtual Currency Platforms, which enables anyone to run its own virtual goods economy, a lot of developers are reportedly earning 100x more revenue than when they were (only) displaying traditional banner ads.
The continued growth of virtual currency monetization in social apps and games both in the US and other parts of the world has led to more intense competition among platform offers. A slew of traditional advertising companies even decided to launch or revamp their current operations to take advantage of the spurt in monetization of apps.
This time not only in Asia, new virtual currency monetization companies have emerged that compete in local markets worldwide: mostly in the States and yes, even in Europe.
How did we get here?
So, the Virtual Currency Industry is growing like never before. That’s great, but did you ever wonder how the companies providing platforms were able to grow so fast? Who raised money to build, launch and market their platform? And who bootstrapped their way into the industry?
Below you’ll find a detailed overview of the industry’s milestones, covering major happenings like company foundations, funding (+ who invested in the companies) as well as acquisitions.
To keep abreast of the current happenings within this industry, we will soon launch a blog on socialnetworkadvertising.com , where we will provide you with news flashes, unbiased insights and the occasional industry’s expert interview.
A quarter billion invested in Virtual Currency Platforms?
From our initial calculations, the total money invested in virtual currency providers to date equals:
$277,650,000
A few notes, though: Rockyou Ads has raised $129M to date, but previous to its latest 2 funding rounds (where it raised $60M from existing investor SoftBank) Rockyou did not offer Virtual Currency solutions to end-users yet. As such, we should probably lower the number with $69M ($129M – $60M = $69M), giving us an amount of $208,650,000 . However, because some companies below were funded without us knowing the exact amount, we should cover that loss by adding $20M, giving us a solid $228,650,000 to end with. We know these aren’t the most accurate numbers, but that’s not what we are trying to accomplish here. We merely want to give you an idea how the Virtual Goods Market is evolving and where the money is floating.
Financing: Overview per company (A-Z)
Adparlor: unknown
Boomerang Networks: unknown
Come2Play: $950,000
Seed, 6/07 (Yossi Vardi $950k)
Deal United: Unattributed
Unattributed, 7/09 (High-Tech Gruenderfonds Sympasis Innovation Capital)
Double Ding: Unknown
Mark Pincus, the CEO of Zynga, self-funded this company.
Fatfoogoo: Unknown
Series B, 10/2007 (Gamma Capital Partners)
Firecue: Unknown
(part of viveli)
Gambit: Unknown
Gratispay: Unknown
gWallet: $12,500,000
Series A 12/09 (Adams Street Partners, Trinity Ventures $12,5M)
Heyzap: $650,000
Seed, 5/09 (Union Square Ventures, Naval Ravikant, Joshua Schachter $650k)
Mochi Media: $14.000.000
Series A, 3/08 (Accel Partners $4M)
Series B, 6/08 (Shasta Ventures Accel Partners $10M)
Offerpal Media: $19,600,000
Series A, 6/07 (InterWest Partners, North Bridge Venture Partners $4.6M)
Series B, 2/09 (D.E. Shaw & Co., InterWest Partners, North Bridge Venture Partners $15M)
Sponsorpay: $4.6M
Unattributed, 8/09 (Team Europe Ventures)
Unattributed, 6/10 (Hasso Plattner Ventures, Kite Ventures, Team Europe Ventures $4.6M)
Orca: $2,000,000+
Seed, 01/2008 (Metamorphic VC, KPG Ventures, David Hirsch, Geoff Judge unknown amount)
Series A, 6/09 (Metamorphic Ventures LLC, KPG Ventures, New York Angels $2M)
(Onetxt)
Peanut Labs: $3,200,000
Series A, 2/08 (Leapfrog Ventures BV Capital $3.2M)
Playspan: $28,300,000
Series A, 9/07 (Easton Capital, Menlo Ventures, Novel TMT Ventures, STIC International $6.5M)
Series B, 11/08 (Easton Capital, Menlo Ventures, Novel TMT Ventures, STIC International $16.8M)
Unattributed, 7/08 (Menlo Ventures, STIC International, Easton Capital, $5M)
Q Interactive: Unknown
Social Gold: $6,000,000
Series A, 8/08 (The Hit Forge, Charles River Ventures, Bay Partners $1M)
Series B, 8/09 (Madrona Venture Group, Bay Partners, $5M)
(Jambool)
Sometrics: $5,550,000
Series A, 5/08 (The Mail Room Fund, Greycroft Partners, AT&T $1.55M)
Series B, 10/09 (Steamboat Ventures, The Mail Room Fund, Greycroft Partners $4M)
Super Rewards: Unknown
Acquired by Adknowledge for $50M.
SupersonicAds: Unknown
Tmp Social: Unknown
(Traffic Marketplace)
fbExchange was acquired by Traffic Marketplace. (3/4/09)
Tokenads: Unknown
(Social Tokens Ltd)
Trialpay: $15,800,000
Series A, 2/07 (Baseline Ventures, Battery Ventures, Index Ventures, Bob Pittman, Ron Conway, Skype, Google $3.1M)
Series B, 2/08 (Index Ventures, Atomico Ventures, Battery Ventures, Baseline Ventures $12.7M)
Twofish: $9,500,000 before being acquired by Live Gamer
Series A, 6/07 (Venrock, Rustic Canyon Partners, $5M)
Series B, 10/08 (Venrock, Rustic Canyon Partners, TriplePoint Capital $4.5M)
(Live Gamer)
Viximo: $5,000,000
Unattributed, 4/09 (North Bridge Venture Partners, Sigma Partners $5M)
Zuora: $21,000,000
Series A, 3/08 (Benchmark Capital, Marc Benioff $6.5M)
Series B, 10/08 (Shasta Ventures, Lehman Brothers, Benchmark Capital, Marc Benioff $15M)
Rockyou: $129,000,000
Series A, 1/07 (First Round Capital, Lightspeed Venture Partners, Sequoia Capital, $1.5M)
Series B, 3/07 (Lightspeed Venture Partners, Partech International, Sequoia Capital $15M)
Series C, 11/08 (SoftBank, SK Telecom Ventures $17M)
Series C, 6/08 (Doll Capital Management $35M)
Series D, 11/09 (SoftBank, $50M)
Unattributed, 6/10 (SoftBank, $10M)
