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Game maker ngmoco raises $25M, buys Freeverse

Can ngmoco become the Zynga of iPhone games? The two look surprisingly similar.

Technology trends and news by Matt Bowman
February 22, 2010
Short URL: http://vator.tv/n/dfa

 Can ngmoco become the Zynga of iPhone games? $25 million says yes. That’s how much the company just raised in a round led by Institutional Venture Partners, with existing investors Kleiner Perkins, Norwest Venture Partners and Maples Investments also participating. Ngmoco is the creator of popular iPhone games like Eliminate, We Rule and Touch Pets.

The company also announced the acquisition of rival iPhone game developer Freeverse, another leader in the space that produces Parachute Ninja, Top Gun, NBA Hotshots, and the ever-popular Skee-ball.

CEO Neil Young (not the still-kickin’ 60s rocker) told TechCrunch he wants to “amass enough scale” to accelerate “away from the pack.” That approach—gobble competitors, grow like crazy on a new rapidly expanding platform (Facebook / App Store) all the while amassing a braintrust for making games addictive and profitable—sounds a lot like Zynga. In fact, ngmoco looks very similar to Zynga circa early 2009: two years old, $40 million in funding, one acquisition under its belt, and a steady stream of gaming hits. The companies also share IVP and Kleiner Perkins as investors.

Zynga now has raised a total of $219 million, just made its third acquisition and is valued at around $3 billion by SharesPost. Since only true predictions are remembered, I’ll go ahead and bet that ngmoco will be the next wunderstartup of Silicon Valley.

Last year, Young transitioned all of ngmoco’s games to a free-to-play model, hoping to monetize with in-app purchases. That's consistent with what Tim Chang, an investor in the company, told us last month: "These companies have to be ready for the shift to free-to-play with in-game microtransactions." All of Freeverse’s games are paid apps, and Young plans to switch them all to free-to-play. A bold move, for sure. Then again, that model has certainly worked well for Zynga, which, according to most speculators, generates hundreds of millions in revenues a year.

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