BadgeVille gets a $25M boost in latest funding round

Less than two years after launching, BadgeVille continues to bring big businesses into gamification

Badgeville, a behavior platform businesses incorporate gamification into their process, announced it has closed a Series C round of venture financing. This $25 million round, led by InterWest Partners with participation by prior investors, brings Badgeville's total financing to $40 million in just 20 months since its launch. 

Gamification, or the use of game-like rewards get customers or employees to participate is a hot area of focus right now. Everything from social media and consumer websites to enterprise software businesses was in on this way to leverage their audience.

Badgeville specializes in applying gaming mechanics to traditionally non-gaming industries, like eCommerce.  By applying game mechanics to a retail website, you can drive more purchases and more social sharing, which translates to increased traffic and revenue. 

With just two years on the scene and 170 customers (from Oracle, Deloitte, Dell, and Samsung, to Universal Music, Fox, Vevo, Barnes & Noble, and Panera Bread).

Currently, the company has six cloud-based frameworks, or templates to assist in gamifying business processes.

Other companies in a similar field include Bunchball and BigDoor. 

Earlier this month, mobile gamification startup SessionM raised $20 million from Charles River Ventures, Highland Capital Partners and Kleiner Perkins Caufield & Byers, and others. 

Gamification seems to be a hot way to add to a product or service without really changing the core of what it does. And according to Gartner Research, more than 70% of “Global 2000″ organizations will have a gamified app by 2015. 

Co-founder and CEO Kris Duggan says that clients have seen an average five-fold increase in user comments, 140% growth in time spent on the business’ website, an 80% jump in user registrations, and 60% increase in employee engagement.

Duggan also said that revenues last year were $5 million to $10 million. This year, they will be $10 million to $20 million.

How gamification boosts a business

Games give you immediate feedback and goals, unlike in real-life when some people only get an annual evaluation. This provides a way for the business and game developers to give the players insight on what they expect and provide help and tools to adjust action to reach goals and get instant feedback.

Games are great at giving a big goal as well as sub-goals that give you more motivation and a general content or narrative arc.

Photoshop's new gamification is a great example of how a company can enlist gamification tools to improve conversion rates from free trial to revenue, empower users, engage and teach people skills where they would have just abandoned the game before. If you have ever opened Photoshop to edit a picture for the first time, you know that their user interface is very intimidating and hard to dive into.

There are few words, instructions and a million entry points. Because of this, very few people using the free trials were converting to buy the product -- especially at the steep $700+ price tag. But Photoshop has been creating ramified tutorials that take 12 key functions for the system and help create and walk people through tasks until they master those tools. Since badges are indicators of something we have done, enjoy doing and have mastered, people are excited to get that reinforcement and learn something valuable at the same time.  

More companies like Microsoft Office are also trying to gamify while teaching skills for their product and increase conversion. And really, whomever learns how to motivate and convert, wins.

BadgeVille works in a similar way with companies, searching for ways to teach, engage, and excite users rather than making interaction a job or chore.