Kongregate, a gaming Web site that targets young men and woos game developers with incentives, has raised over $5 million to support its growth.
It lets developers compete to create games, and rewards the best of them.
The San Francisco-based company launched publicly in March (our coverage), and has grown since then to include nearly 1,500 games from 750 independent game developers. It is nearing a million unique visitors per month, 85 percent of whom are male, and mostly in their early twenties or younger.
Kongregate allows any game developer to submit a Flash or Shockwave-based game to the site, then chat with and receive ratings from users as they play the game. It makes money from both advertising and from games with virtual goods for purchase. It licenses games from developers, and gives them a cut of any earnings.
With the additional funds, Chief Executive Jim Greer says the company will expand its developer platform to allow for more complex multi-player shooting and strategy games. It will fund promising game developers to build games, and allow other companies to fund games on the platform too. Developers of the most popular games will get up to 70 percent of earnings. Right now, developers get between 25 and 50 percent based on how popular the game is, and how closely the company works with Kongregate.
Other, much larger online gaming sites also target young men, such as Microsoft's Xbox Live Arcade. These sites don't allow people to develop and launch their own games and make money, says Greer.
The most popular online gaming sites, such as King.com or EA's Club Pogo (where Greer used to work), have user bases that skew towards older women -- these sites count their users in the tens of millions, but have also been around for years, not a few months. Club Pogo makes over $100 million a year, according to Greer, largely from people paying subscriptions to access certain games.
This round was led by Greylock Partners but the company has already received funding from angel investors including Reid Hoffman, Joe Kraus, Jeff Clavier (who blogged about the company here), Richard Wolpert, and others.