A Playdom Funding Would Mean No Quick Exit
Last week, we learned that Playdom is on track to make $50 million in annualized revenue from virtual goods. Yesterday, VentureBeat added something more: The social gaming company is looking to raise a round “in the double digits” that would value it at between $100 million and $200 million. “I think they’re going to be able to get that valuation,” added a source in the report. Playdom didn’t comment when we asked.
Rumors about a funding, possibly at a $200 million valuation, first surfaced in early April. At that time, the company said it was putting off any fundraising until the summer. Now it’s October, and the company has proven that it can create at least some successful games on Facebook, as well as retain its pole position on MySpace. Popular games include the Mobsters series and Sorority Life. In total, the company claims to have 28 million monthly active users. It has also grown from 43 employees in April to 110 now, with an additional office in San Francisco to support its headquarters in Mountain View, California.
Playdom might seem like the sort of company that an older, larger, traditional gaming company would want to acquire in order to get a foothold in the social gaming market. This new funding suggests Playdom is more interested in continuing to compete against top rivals like Zynga and Playfish — and seeing where that takes it. After all, we wouldn’t be surprised to see Zynga go public sometime next year. If it does, and if Playdom can continue growing its market position as well, the company may be able to fetch a higher purchase price or even attempt an IPO itself.
October 8th, 2009 at 10:13 am
[...] It is not clear what any other developer can do to stop this, besides find more effective ways to build and market their own apps. While Zynga is sometimes busted for things like spammy invites, many other developers have been or actively are guilty of the same. Perhaps a group of VCs or a private equity firm will step in with $100 million, roll up some of the smaller yet successful developer shops, and go to war? Perhaps more established gaming companies will make acquisitions and devote more resources to social gaming? Yesterday, casual game company PopCap raised $22.5 million in a large part to push its social gaming effort faster — this is after ten years of the company growing to 240 employees without ever taking a round. And it was not surprising to hear, earlier this week, that another large rival, Playdom, is looking to raise more money. [...]