Is this the year we see a mobile gaming company break out from the pack and become the Zynga of iOS or Android? Andreessen Horowitz is betting so.
The venture capital firm led an unprecedented $18 million first round in TinyCo, formerly known as Brooklyn Packet. The San Francisco-based company is the maker of Tap Resort Party and Tiny Chef, which have both seen more than 5 million downloads. The valuation, we’ve heard, is somewhere around $98 or 100 million — certainly eyebrow-raising in this space, although TinyCo wouldn’t comment on it. Netscape co-founder Marc Andreessen is joining the company’s board.
Both of TinyCo’s top titles are essentially resource management games with players designing either a restaurant or a resort. Revenue from both games comes mostly through in-app purchases of virtual currency, either Chef Bucks or Shells. TinyChef has reached the second top-grossing spot in the Apple app store.
Unlike Pocket Gems, another prominent game developer that took a smaller $5 million round from Sequoia Capital in December, TinyCo opted for a sizable financing round. Considering the rankings of their titles in the app store, neither company should have really needed funding. Before the round, TinyCo was able to grow to 40 employees on the back of its own revenue.
“Mobile-social gaming is at a pretty nascent stage,” said co-founder Ian Spivey. “In 12 months, it’s going to be a very different landscape with 100 million new Android handsets and 50 million more iOS handsets coming on. More and more people are going to become comfortable making in app payments and the quality of games is going to go up.”
He said, “We want to give ourselves all the tools we need to become that market leader.”