Gaming advertising network RockYou raises $23 million

Steven Loeb · March 2, 2015 · Short URL:

RockYou now has over one billion impressions a month, making it a top 10 video property

There's a strange desire on our part to always want something new, and to believe that just because something is no longer fresh it has no value. RockYou rejects that idea. It is a cross-platform advertising network for games that acquires older titles to squeeze out the last bits of profit. And that business model is working out very, very well.

The company has raised a new $23 million round of funding, it was announced on Monday, led by Columbia Capital.

The new funding comes less than a year after RockYou raised a $10 million round in July of last year from FastPay, a financial platform for digital media. With this latest round, the company has now raised $43 million, as well as $16 million in debt,

Founded in 2005 as widget maker, with a focus a slide show service, RockYou pivoted its model in 2010 to put its focus, instead, on in-game monetization. Prior to that pivot, the company had raised $125 million.

Here's how RockYou works: the company buys the rights to older titles, meaning games that have been around  for a few years, and which are past their apex. RockYou buys them, and wrings profit out of them through advertising and digital goods.

There are three scenarios she described to me under which a company would sell of one of its titles, despite the fact that there is still money to be made from it.

First, there are the one-hit wonder companies, who have to figure out what they want to do next. RockYou will give them cash for the title, and continue to run it. The second scenario is a big company, such as Disney, which may have a profitable game, but one that is not making enough money to make it worth their while.

And, finally, are companies that are in financial trouble that  might not want to shut down games, so they give them to RockYou instead so they can have a second life. 

RockYou says that it will use the new funding from in order to "continue growing and diversifying its audience through partnerships with developers of established, still-popular games and to further expand its mobile offerings."

"We plan to have 40% of our Q4 revenue from mobile," RockYou CEO Lisa Marino told me. "We are growing it aggressively and it's a core use of proceeds for the recent round."

RockYou's in-game video advertising platform currently delivers over 1 billion impressions a month, placing it in the Top 10 of comScore's Top 100 Video Properties for January 2015. The company now has 21 games on Facebook and mobile platforms.

"While we do not share our financials as a private company, I can say RockYou has grown dramatically since 2013," said Marino. "Revenye more than tripled between 2013 and 2014. We expect revenye to double again this year. We are also sustainably profitable."

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RockYou is a leading provider of applications and widgets on the web. RockYou widgets include photo slideshows, glitter text, customized Facebook applications and voicemail accessories that are simple to use and enable people to frequently refresh their online style. Founded in 2006, RockYou has over 35 million users, serving over 180 million widget views per day in more than 200 countries. RockYou applications are customized for easy integration across all social networks including Facebook, MySpace, Bebo, Friendster, Tagged and hi5.