Gamification is becoming more than just a buzzword, but the next profit making machine for businesses that will likely be around a long time. At least the VC community seems to think so. And to prove it, Badgeville recently raised $25 million in Series C financing in a round led by Interwest Partners.
El Dorado Ventures, Trinity Ventures and Webb Investment Network also participated. This latest round brings the company’s total funding to $40 million.
As part of the deal, InterWest General Partner Doug Pepper will join the company’s board of directors.
“By providing a true Platform-as-a-Service solution, the company has quickly become the leader in gamification — and also an unparalleled innovator in how businesses should approach user engagement, employee efficiency and customer loyalty,” Pepper said. “Badgeville has all the indicators of a successful SaaS company: a highly-sophisticated platform, a world-class management team and a growing market.”
And Badgeville isn’t the only gamification company to recently raise serious cash. SessionM, a mobile gamification startup, raised $20 million earlier this month from Charles River Ventures, Highland Capital Partners and Kleiner Perkins Caufield & Byers, among others.
Gamification works to make a game out of anything. It applies gaming techniques and ideas to broader marketing platforms to engage users and encourage them towards desired marketing directions. Gartner estimates that more than 70 percent of Global 2000 organizations will be using gamification techniques by 2015. M2 Research, meanwhile, pegs the gamification market at $2.8 billion by 2016. About 52 percent of 1,000 industry leaders expect gamification to play a role in marketing through 2020, according to the Pew Internet and American Life Project.
“The business world now understands and respects the huge benefits that gamification programs offer,” said Kris Duggan, CEO, Badgeville. “Gamification is a modern strategy to measure and influence user behavior in both customer and employee environments. With lift of 20 percent to more than 200 percent in key business objectives, these strategies, deployed properly, have proven they are here to stay and will infiltrate all aspects of business, from CRM systems to updating stagnant loyalty programs to compete in the social media savvy marketplace.”
Launched in 2010, Badgeville helps brands and large companies measure and influence user behavior through gamification techniques on a cloud based platform. The company uses six cloud-based frameworks that work as templates for gamifying a company. Its client base includes the technology, retail, healthcare, financial services, hospitality, education, and employee performance management sectors. Its platform is used to grow engagement and increase the adoption of user experience.
The company claims to have launched the world’s first ISV program, enabling customers to more easily embed Badgeville into their technologies. Its IP includes a number of patents proprietary to the company.
The company has more than 165 global clients, up from 100 last January. Badgeville’s customers include Oracle, EMC, Deloitte, Dell, Samsung, CA, NBC, The Walt Disney Company, Universal Music, Recyclebank, oPower, Fox, Vevo, Barnes & Noble, eBay’s X.commerce, Panera Bread, Rogers Communications, Bell Media, The Active Network, Danone, and Ford. The company supports clients in more than 18 countries, including dozes of multinational Fortune 1000 businesses. Based in Menlo Park, Calif., it has recently expanded service hubs into London, Austin and New York.
Its competitors include SessionM, Big Door and Bunchball.
Badgeville has more than 70 employees. The funding will be used to support customer demand and scale the company’s staff, Badgeville’s CEO Kris Duggan explained on his blog.