Virtual worlds aren’t exactly fashionable these days. They went through a hype cycle when everyone predicted that we’d all be living virtual lives in online worlds like Second Life. Now our expectations of them are more down to earth — but new virtual worlds continue to pop up.

MiniMonos is the latest. The Christchurch, New Zealand-based company has raised $800,000 in New Zealand dollars ($550,000 U.S.) for a virtual world for children.

MiniMonos is a virtual island focused on fun and sustainability. Kids can create monkey avatars, explore, chat and play.

The investors include the Venture Accelerator Nelson (VANL) and the government’s Seed Co-Investment Fund (SCIF, part of NZVIF). It is the first co-investment deal between the two groups.

Previously, MiniMonos raised money from angel investor Phil McCaw, one of the first investors in Trade Me, Australia’s equivalent of eBay. MiniMonos is currently in “open alpha” testing, and it is targeting children (primarily boys) in the US. The company plans to launch its beta test in early April. The company’s founder, Melissa Clark-Reynolds, is a seasoned tech entrepreneur and entrepreneur in residence at Wellington’s incubator, Creative HQ. She is also an ambassador for Al Gore’s The Climate Project. The company will seek more capital later this year.

Clark-Reynolds started the company in 2007. Her research showed there was a gap to fill for boys who want to play online games without the constant pressure to buy things. In MiniMonos, children play in treehouses that require care and nourishment. Living in a treehouse that is part of a live tree, rather than chopping trees down to build houses, is one example of a message of sustainability. It embodies core values such as sustainability and generosity, but it doesn’t deliver those values through a boring lecture.

The world also has a recycling game where you use a catapult to throw trash into the correct recycling bin, a flying game where you collect wind clouds and avoid pollution clouds, and a swimming game where you use balloons to clean up trash in a swimming hole. In the swimming game, as you clean up, you  see more fish. But if you want to see turtles and other cool sea life, you have to come back and clean every day.  And if you haven’t recycled for a while, your treehouse will get messy. Your tree house is also powered by a wind turbine.

There is lots of competition, including Club Penguin, Wiglington and Wenks, Webosaurs, Chobots. The company has 10 employees. MiniMonos says that sign-ups are growing fast and kids have created more than 20 blogs to track the activity in the game.