A class-action lawsuit and some complaints about offer-based ads certainly haven't scared away investors from Zynga. Today, the world's largest social games company announced that Digital Sky Technologies (DST), the largest internet investor in Eastern Europe, has agreed to purchase approximately $180 million of the company’s securities. Joining DST in this investment round are Andreessen Horowitz and Tiger Global, and current Zynga investor Institutional Ventures Partners has added to its position in the company as well.
Zynga said "a portion of the investment will be used to fuel Zynga’s growth and the rest will be used to facilitate liquidity for employees and investors." It's also noted that DST is a passive investor, and therefore will not hold a seat or have observer rights on Zynga’s board of directors. Adding in previous rounds of funding, and we see that Zynga has raised an incredible $234 million so far.
“Social games are enabling millions of people around the world to connect and play together everyday. We are excited about our relationship with DST as they are a global player dedicated to creating services that are meaningful to consumers in the long term,” said Mark Pincus, founder and CEO of Zynga. “The investment from DST allows us to continue delivering on the promise of social games for consumers, making fun the biggest way for people to interact.”
“We share in Zynga’s mission of connecting people through games and believe they are in a solid position with their team, offerings and market share to succeed in a dramatic way,” said Yuri Milner, chief executive of DST. “Our earlier investment in Facebook and now in Zynga underscores our premise that social networking and social entertainment will define the next generation of the web.”
Zynga now has over 230 million monthly active users. The company most recently launched PetVille, which has been growing insanely fast and already has over 11 million users.
7 Comments
December 16, 2009
A ~1 to 1.5BN valuation blows my mind. I know Social Gaming is big, but that is epic. Will the market keep up?
December 16, 2009
Over $200 Million invested? . . . And how much does that get? Is the market cap really over $1B? Does anyone seriously think that this casual shovelware maker is worth more than established players that make games which people pay good money for? (Companies like TTWO and THQI . . . who's combined market cap is less than that!)
And a biz model based on click-through ad scams?
December 16, 2009
I have a strong feeling that there's going to be a bubble burst on some of these social gaming companies before they reach market stability.
December 16, 2009
Indeed. If advertising is so profitable for games, expect to see more of it in the console games. The sports games are already filled with it. The buyers of those ads are probably getting an amazing deal considering they get thousands of hours of impressions of the highly sought 17 to 35 year old male that apparently has extra money to spend.
December 16, 2009
TTWO and THQI probably make less profit than Zynga. Hell Facebook itself probably makes less profit than Zynga. Don't know why all the doubters don't understand than their games monetize well and are playing be 3X-5X the number of people that play WoW.
I'm not even sure what Speculawyer is talking about, because Zynga doesn't have ads running against their games.
December 18, 2009
There's a lot of money being thrown around in a very young industry, and that sends up red flags for me. I'm not saying that necessarily Zynga will implode, but I could see some company in the space get overvalued and destroy itself, leaving a lot of disappointed investors.
March 15, 2010
The sports games are already filled with it. The buyers of those ads are probably getting an amazing deal considering they get thousands of hours of impressions of the highly sought 17 to 35 year old male that apparently has extra money to spend.
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