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PlayPhone Rings In $18.8M
Wireless games, ringtones distributor goes
north, south of the border.
Red Herring
By Ken Schachter
Thursday, May 10, 2007
PlayPhone, a website where cell phone users can download a Snoop
Dogg ringtone or "The Fast and the Furious Tokyo" game, has closed
on $18.75 million in series C funding led by Scale Venture Partners,
the company announced Thursday.
The funding deal steers PlayPhone on a course to expand into foreign
markets where it will try to clear cultural and business hurdles
by giving wireless users a heavy dose of U.S. pop culture.
"One of the things I really liked about this company is it’s not
a one-hit wonder," said Sharon Wienbar, managing director at Foster
City, California-based Scale.
Rival firm Jamster became wildly popular on the strength of its
ringtone "the Crazy Frog" before Rupert Murdoch’s News Corp. bought
51 percent of the firm (known as Jamba throughout most of the world)
from parent Verisign for $187.5 million in September.
PlayPhone Chief Executive Ron Czerny the global push will be launched
in Canada, Mexico and Brazil over the next 100 days. Mr. Czerny
said the key to success abroad will be in tapping demand for U.S.
music and games.
"It’s always aggregating the killer content, how we convince the
big publishers to aggregate and license their killer content," he
said. "We’re the largest aggregator of branded games in North America.
We have a lot of exclusive deals. We believe in exclusivity."
PlayPhone’s more than 50 content deals include relationships with
ABC, SEGA and Bandai.
Mr. Czerny acknowledged that markets in the Far East and Europe,
the home turf of prime competitor Jamba, which was founded in Berlin,
"are very tough to crack." He said PlayPhone is biding its time
in both markets for the right moment to launch.
Four-year-old PlayPhone, which has raised almost $30 million in
total venture funding, lets mobile phone users download ringtones
and games "off deck" beyond what wireless carriers offer. Until
recently, providers like Verizon Wireless and Cingular resisted
letting an outside company offer their customers content, but now
the practice is well established. "They were direly afraid of becoming
a dumb pipe," said Ms. Wienbar, who is joining the PlayPhone board
of directors.
Now, subscribers to major wireless providers can go to the PlayPhone
web site, download content and be billed by their carrier, which
gets a slice of the revenue.
"It just enables massive consumer choice," said Ms. Wienbar, whose
firm also has investments in Glu Mobile, a mobile game publisher,
and mBlox, a provider of billing services for mobile carriers.
Also joining the latest funding round are prior investors Cardinal
Venture Partners and Menlo Ventures.
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