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Scale Venture Partners Leads $18.75M Round For PlayPhone
VentureWire
By Arthur Kimball-Stanley
Thursday, May 10, 2007

Less than ten months after raising $9.1 million to market its mobile content Web site and sales software, PlayPhone Inc. has taken in an additional $18.75 million in its Series C round of financing.

Scale Venture Partners led the round for the San Jose-based company, bringing the total financing since its founding in 2003 to nearly $31 million. Past investors Cardinal Venture Capital and Menlo Ventures also took part in the deal.

Proceeds will be used to pay for marketing as PlayPhone rolls out its service in Canada, Mexico and Brazil over the next few months, according to Chief Executive Ron Czerny. The company, he said, still had much of their Series B cash available, but wanted to have as much capital as possible to grow consumer awareness of the company.

PlayPhone aims to have over 100 million unique users by 2008, Czerny added.

PlayPhone provides a marketplace for mobile content, such as ring tones and games, through its Web site. The company also licenses its technology to other companies to sell their own branded mobile content on the Internet. Content providers that have signed up to use its online retail service include Sega Corp., ABC Inc. and Lycos Inc., according to a release issued by the company.

As part of the deal, Scale Venture Partner Managing Director Sharon Wienbar will join the company's six member board. Wienbar said she had been looking at the company for over a year and though Scale passed on the opportunity to invest in August because the Series B round's size didn't conform to the firm's mid-stage investment model, her interest in the business remained strong.

Scale Venture Partners is very interested in plays that help push the use of mobile content, Wienbar said. As people spend more and more time away from their big screens and staring at their little screens, she added, more money will begin flowing in the direction of selling the content and advertising on it.

"The world needs companies like PlayPhone because the majority of content that's available right now is purchased on deck and given what the carriers carry that means there is very limited shelf space," Wienbar said. "If you are not one of the companies with premium deck placement you are not going to sell and you are going to need a company like PlayPhone."

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