hi5 Raises $14 Million in Venture Financing for Social Entertainment

hi5 announced today that they have raised $14 million in venture financing from Crosslink Capital.  This is the 2nd round of financing for hi5 after their round of $20 million in July 2007.  The new round of funding is meant to accelerate hi5’s expansion into social gaming and virtual goods.  After their previous round of funding, hi5 made some big moves by introducing the hi5 Coins virtual currency, a virtual gifts store, the hi5 Games channel and most recently animated avatars.  What will they be doing with this new round?

It seems as if hi5 is attempting to get into the “social entertainment” business, although there isn’t much detail about what that entails.  I think this may mean converting their social network into an entertainment network where users are able to play games, watch videos and more, and use virtual currency to purchase premium goods and entertainment.

According to Bill Gossman, CEO: “hi5 is among the companies leading and defining the rapidly emerging social entertainment category, and this round will enable us to fully capitalize on what is already a massive market opportunity,” said Bill. “Crosslink has been at the forefront of this revolution with investments in Pandora and Like.com as well as successful public market experience with Omniture and Ancestry.com, so we are thrilled to have Jim’s expertise joining the company.”