Just a couple of weeks after I wrote about SCVNGR, the location-based gaming start-up has raised $15 million in second-round funding based on a $100 million valuation. The funding from European venture capital firm Balderton Capital includes support from previous investors Google Ventures and Highland Capital Partners and brings SCVNGR’s total to about $20 million. The money will go toward helping SCVNGR grow its business abroad and build out its operations. Last month, I interviewed Seth Pribatsch, chief ninja of location-based gaming service about the promise of gaming as a means to drive user adoption of location-based services.
SCVNGR, which is on pace to hit a million users soon, competes in the location-based space with Foursquare and others, but it emphasizes real-world games and challenges, which Priebatsch told me are much more engaging than simple check-ins and badges. He said 85-90 percent of the time, when SCVNGR users post an update from a location, they share about a challenge, not just a generic check-in. Challenges can be something like taking a picture of an item from a business, which can decide to offer a reward to customers. SCVNGR makes its money by charging large corporations to build challenges atop its service. More than a 1,000 companies have signed on as partners, including Coca Cola, which ran a successful campaign at a number of malls during the holiday season.
As I noted in my previous story, SCVNGR has its own take on location, which will increasingly separate it from location rivals like Foursquare, which also utilizes some game mechanics and boasts 5 million users. Now whether adding game mechanics to locations is a business that can scale beyond early adopters and support a $100 million valuation is an open question. But the business seems to have its share of believers.
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