PlayPhone raises $18.75M for easy but expensive mobile content

PlayPhone, a San Jose company that lets you download mobile games, ringtones and other content from the Web, has raised $18.75 million in a third round of financing.

Scale Venture Partners led the round, which included existing investors Cardinal Venture Partners and Menlo Ventures. This funding will allow PlayPhone to expand into additional international markets, the company said.

All you do is go to PlayPhone, choose a game, and hit a download button. It is dead simple. It makes you sign a terms agreement, asks for your phone number, and then it sends you the game or other content you’ve selected. PlayPhone’s advantage is in bypassing your phone carrier’s “deck,” the homepage of your phone that gives you a menu of pre-installed or otherwise available content.

The price for PlayPhone is somewhat steep. You pay $9.99 a month for 14 credits. We selected a monopoly game, and it cost 7 credits, meaning we an only use two such games a month for that price. Moreover, it charges another $9.99 a month for you to send 30 text messages with the service. While the quality is better than most free games, the question is whether PlayPhone can really get the traffic that its aiming for: 100 million unique users by the end of next year. Many other players are offering free or cheap mobile games. With PlayPhone, you get billed through your carrier, so we’re assuming PlayPhone is forking over quite a bit of its income to the carriers.

Playphone also powers mobile content sites for SEGA, ABC, Bandai, Lycos and RealNetworks and others

The company raised $9.1 million in August of last year (see our coverage; scroll down).

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