Mobile Gaming Start up Funzio Raising $50M for a $350M Valuation

by Kim-Mai Cutler

In what will be a bellwether for the mobile gaming industry after Zynga’s deal to buy OMGPOP, Funzio is looking to raise $50 million at a $350 million pre-money valuation, according to sources familiar with the talks. The company declined to comment.

Funzio is the maker of Crime City and Modern War, both graphical RPGs that have held top ranks on the grossing charts on iOS. Their vision is to offer true cross-platform games that work across the web and mobile devices.

So here are pluses: Funzio has a hungry and experienced team. The company’s chief executive Ken Chiupreviously sold a startup to Zynga and served as a general manager for a little under a year there. Both he and Anil Dharni were behind Storm8, another mobile gaming company with several top-grossing Android games under its belt, before they split with the other co-founders and started Funzio. The company’s roadmap and traction were compelling enough that they were able to poach Jamil Moledina, an executive who spearheaded third-party publishing efforts for Electronic Arts.

Funzio has a proven ability to launch games on Facebook and mobile platforms. At its peak, Crime City has 7.3 million monthly active users on Facebook, according to AppData. (It now has 1.6 million monthly active users.) The company’s two iOS games have managed to keep grossing rankings in the Top 50 in the U.S. since the beginning of the year. (See the charts below from rankings tracker App Annie.)

A $400 million post-money valuation is not unreasonable when benchmarked against publicly-traded mobile gaming companies. This isn’t a perfect comparison since every gaming company has a slightly different model and target market, but Glu Mobile, a publicly-traded company that has some decently ranked titles but is also saddled with a declining featurephone business, has a market capitalization of $281.8 million. Gameloft, a French mobile gaming company that as a similar target demographic as Funzio, has a market capitalization of 365.5 million euros ($477.6 million).