Although it announced a $30 million third round of funding in January, Kabam is talking to investors about adding significantly more money to its bank account. It is looking to raise between $50 million and $75 million, according to two sources we’ve spoken with, following a quiet but lucrative 2010 for the company.
After initially building a network of applications for fans of sports and television shows, Kabam transitioned in 2009 to focus on social games for serious gamers. Its initial foray into this type of application, Kingdoms of Camelot, has according to industry sources generated significant revenue for the company despite having relatively low usage numbers. At its peak, the game had 933,000 daily active users and 6.57 million monthly active users; it has been declining in recent months, due to Kabam’s focus on newer games like Glory of Rome and Dragons of Atlantis. Still, the game has largely powered Kabam’s recent revenue growth, which many in the industry believe is in the tens of millions of dollars.
The company, for its part, isn’t commenting on this article.
Top 5 Applications By Kabam
|1.||Dragons of Atlantis||3,084,367||308,635|
|2.||Glory of Rome||1,799,503||112,756|
|3.||Kingdoms of Camelot||1,420,958||359,781|
But why would the company want to raise even more money, after just announcing this last round?
First, the $30 million was actually raised in 2010, so a new round wouldn’t follow as closely on the prior one as it might appear.
Second, Kabam has been investing heavily in its other games. As you can see in the chart, via AppData, our tracking service for the top apps on Facebook, the developer is getting at least decent growth from some of them. Zynga may have led social gaming to the mass market but Kabam’s goal is to take social gaming back to hardcore players. A new round could help it cement its lead in this area, even as most larger developers continue to focus on tried-and-true varieties of social games, like simulations.
Third, the company still has some work to do in adapting to Facebook’s latest platform changes. It is still moving over to Credits, Facebook’s mandatory paid virtual currency. And, like many other developers, it is trying to optimize its marketing and advertising efforts after Facebook pared down communication channels last year but didn’t introduce significant new ones. Engaging and monetizing users on Facebook has become more costly than last year.
The new funding, if it happens, would follow a total of nearly $40 million raised over three rounds from Canaan Partners, Betfair, Redpoint Ventures and Intel Capital.