Virtual Worlds News

NewsBrief: Twinity's Metaversum Secures $4M in Funding

Germany's Metaversum GmbH, the developer of the online mirror world Twinity, said today it has raised an additional $6.3 million from a group of venture capital funds. BFB BeteiligungsFonds Brandenburg joins existing investors Grazia Equity and Balderton Capital in the company's second round of financing. The money will help Metaversum develop additional mirror worlds -- the flagship product Twinity and a virtual Berlin are currently in public beta. The launch of virtual Singapore slated to go live this summer. A London world is also in the works. Twinity members "can create a personal avatar, explore real cities virtually, move into a 3D home, chat with friends, work, get creative, or just have fun together," said Metaversum. "In times such as these, a financing round like this is a great confirmation for Twinity and for our vision of building a real virtual world," said Jochen Hummel, Metaversum's chief executive.

Chinese Game Stocks Tumble on Virtual Currency Regulation

In the three-day period since the announcement of China's new laws regulating virtual currency, stock prices for major Chinese online game operators have crumbled, plunging by as much as 10% according to a report from Seeking Alpha. Affected companies are all traded in U.S. markets and include Shanda Online, Changyou, The9, NetEase, Perfect World, and Giant Interactive. This is a dramatic turnaround after months of share prices generally trending higher. 

NewsBrief: Second Life Stake Changes Hands

Reportedly, Linden Lab has been the beneficiary of at least four rounds of venture capital investment. VCs with a stake in the virtual world include Benchmark Capital; Globespan Capital Partners; Catamount Ventures, Omidyar Network, and individuals Jeff Bezos and Mitch Kapor. Earlier this week, an additional investment firm can be included in that lineup of stakeholders, albeit via a different approach. Stratim Capital, a San Francisco-based institutionally funded private equity firm that secures equity positions via the secondary market said it "bought almost the entire position of an existing [Linden Lab] shareholder." Web site peHUB had the story first, though little more was discovered beyond the acquisition. The last known time a stakeholder sold shares was in 2007 when TechCrunch reported that Catamount had sold 10 percent of its position in the Second Life company.

Forterra Raises $1.2M

Forterra Systems, the Menlo Park, CA company originally behind There.com has secured $1.2 million in funding from longtime backers In-Q-Tel, Chichen Itza Ventures, Jerusalem Venture Partners and Sutter Hill Ventures. Forterra focuses on virtual world technology for military, education, and corporate training simulations. The recent funding is part of $2.7 round it hopes to soon finalize. Videos of some Forterra projects can be viewed here. [via Venture Beat]

Report: VC Funding, Number of VC Execs Decline

Last month, VirtualWorldsNews.com reported on the declining dollars venture capital firms had invested in virtual worlds in the first quarter of 2009 -- down substantially from the same quarter a year ago as well as sequentially. Now, data from the National Venture Capital Association (NVCA) and a new study from VentureSource layers on the news with some far-reaching data measuring the total scope of VC funding, finding that in 2008 there was a decline both in the number of active VC funds as well as the number of principals, or lead investors, at VC firms.

The bad news: the drying up of venture funding and an exodus of talent that has heretofore written the big checks is fact. The somewhat better news: As reported earlier, the decline in investment for virtual worlds was consistent with the drop in overall venture capital activity.

GameGround Secures $4.1M in Funding

GameGround, an Israeli company which says it has designed a service to distribute high scores and other in-game milestones to a subscriber's social graph, has reportedly secured $4.1 million in funding from Sequoia Capital. The company was started by Shaul Olmert, previously an executive with MTV who managed MTV Networks' Kids & Family's digital products business. He is also the son of former Israeli Prime Minister Ehud Olmert. Sequoia calls GameGround a "web-based gaming console that allows gamers to manage, maximize, and broadcast their gaming activities." GameGround describes the service as "an all-new personalized gaming center built around advanced technologies that aggregate all your web-wide gaming activities into a single online destination." Lead on the investment is Haim Sadger, a partner with Sequoia Capital Israel.

$68M Invested in 13 Virtual Worlds-Related Companies in Q1 2009

Show Initiative, the leading virtual worlds and virtual goods trade media company, has announced findings from a comprehensive study of public transactions showing that investors put more than $68 million in 13 virtual worlds-related companies in Q1 2009.

That's substantially down from both Q1 2008, when $184 million was invested in 23 companies, and Q4 2008, when $101 million was invested into 13 companies. However, the decline in investment for virtual worlds is consistent with the overall drop in venture capital activity during the recession and, compared to some sectors, favorable.

App And Avatar Creator FUHU Gets $6.5M And Distribution

FUHU is trying to make headway in the use of avatars for identity. With $6.5 million and a distribution deal from The Acer Group, as covered by our sister site Virtual Goods News, it's got a leg up. Like mEgo, which itself drew $2.5 million earlier this year, FUHU's product UrFooz lets users create a portable avatar as a means of organizing all their other social media, including photos, videos, bookmarks, and social network accounts. The avatar can be managed and customized through Fooz World and updated anywhere else the Fooz Card is embedded on the Web. 

The distribution deal with Acer will see Fooz Cards distributed on all Acer computers (including Gateway, eMachines, and Packard Bell systems) as well as smart phones. The company says that could add 1 to 2 million users a month through the Acer registration system. If so, that could be a huge push for both avatars in the mainstream and virtual goods.  Earlier this week, UrFooz announced a license for NBA-based virtual goods, which users can buy to tweak their avatars, making its offerings even more widely appealing. [via Virtual Goods News]

Viximo Repositions As Content Provider With New CEO And $5M In Funding

It's been clear for awhile that changes were afoot at Viximo, but only recently has it become clear just how dramatic those changes are going to be. The company has restructured, with some employees let go last month and former CEO Rob Frasca replaced by Dayna Grayson (of Viximo investor North Bridge Venture Partners) as acting CEO. Viximo closed a new round $5 million round of funding from North Bridge and Sigma. Perhaps most importantly, the company is refocusing itself around a new virtual goods strategy: providing content for partners to sell.

It's been clear for awhile that changes were afoot at Viximo, but only recently has it become clear just how dramatic those changes are going to be. The company has restructured, with some employees let go last month and former CEO Rob Frasca replaced by Dayna Grayson (of Viximo investor North Bridge Venture Partners) as acting CEO. Viximo closed a new round $5 million round of funding from North Bridge and Sigma. Perhaps most importantly, the company is refocusing itself around a new virtual goods strategy: providing content for partners to sell.

FlowPlay Raises $1 Million, Licensing Tech To Others

FlowPlay, the creator of tween and young teen virtual world OurWorld, has raised $1 million. That's enough to carry the company over into profitability CEO Derrick Morton told TechFlash.  OurWorld, launched just over a year ago, mixes casual games with a larger narrative and social environment. FlowPlay previously raised $500,000 in angel funding and a $3.7 million Series A round in February 2008.