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 (s goog) 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 (s ko), 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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