Blog Post

Social Apps Firm RockYou Gets Its Big One: $35 Million Third Round

Here’s one of the most anticipated fundings in a while… RockYou, a maker of social networking widgets, has raised a $35 million third round led by DCM, with participation from several private backers. Dollar figures for the San Mateo, CA-based company’s two previous rounds have not been reported. The funding is the latest in a sting of big late-stagers over the past month or so, including rounds for WetPaint, Ning and Meebo. And back in January, RockYou’s arch-rival Slide took in $50 million. The relative size of this round, as well as the fact that it came several months after Slide’s will probably stoke the narrative that RockYou remains a pace or two off the leader.

The raise comes amid unconfirmed reports that the company faced a strategic fork in the road, weighing whether to cash out now at a modest valuation, or raise a big one and go for broke. As successful as the company has been at getting its apps installed onto user’s social networking pages, making money is still a tough task. Like a number of its competitors, the company runs a social networking ad network, though when I spoke to CEO Lance Tokuda back in March (a lifetime ago, arguably) he said that 30 percent of its inventory went to in-house ads, while many of the other advertisers were actually other companies pushing their apps. Recent reports have said total revenue for widget-based ads remains fairly thin — just like the ads that run against the broader social network.

Pic of CEO Tokuda courtesy Tychay