BigDoor closes $5 million deal from Zynga backer Foundry |
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BigDoor has unlocked a $5 million venture capital round led by Foundry Group, a significant financing deal that the Seattle startup will use to roll out a new platform that allows publishers to add badges, leaderboards, virtual currency and other offerings to their Web sites. BigDoor has already landed two significant Web publishers in the Seattle area, providing the technology to Cheezburger Network and BuddyTV. (We wrote about Cheezburger's new trophy service on Monday).
BigDoor co-founder Keith Smith said the service adds a direct "feedback loop" to a publisher's Web site, driving deeper engagement with users through the interactive services. Smith sees more publishers adopting these offerings, especially as services like Gowalla and Foursquare popularize the idea of badges.
"As human beings, we just kind of naturally respond to these types of rewards and you can see lots and lots of examples in the offline world," said Smith, pointing to merit badges in the Boy Scouts and frequent flyer miles from the airlines. "In terms of using a reward-based currency system or point system -- in the digital world it has just not been that readily available."
Leaderboard and badge systems have won fans among social media games, and now Smith wants to offer some of those same services in the online publishing world. In fact, he said the system could help eradicate boneheaded comments from anonymous users.
"It gives you an avenue to have the community police itself," said Smith, adding that participants are more likely to disclose their identities because they want to earn points as valuable members of the community.
As a result of the financing deal, Brad Feld of the Foundry Group has joined BigDoor's board. Interestingly, Feld also serves as a director at fast-growing Zynga, which has incorporated point systems, leaderboards and virtual goods into its leading social media games.
“BigDoor should become the standard platform used by companies to implement game mechanics,” said Feld in a statement. “There can be multiple orders of magnitude difference in how virtual economies are implemented, and BigDoor’s platform has the ability to help companies get it right.”
Also participating in the financing deal is existing investor Founder's Co-op, with general partner Andy Sack saying that game mechanics are becoming more prevalent at online sites.
"Every site is going to want game mechanics and virtual economies because it makes sense for the user (i.e. more fun) and for the publisher (ie. more money)," said Sack in an email. "They're really onto something in my humble opinion."
Big Door, which employs six people, had previously raised about $715,000 from angel investors.
The startup, which shifted its focus late last year, is still experimenting with its revenue model. But in the short term it plans to make money by charging online publishers every time there's an API call. It also plans to take a small transaction fee each time a sale occurs on a virtual good.
The first 75,000 API calls are free, allowing small publishers to test it out at no charge. It then charges $150 per month for one million API calls and $1,200 per month for 10 million API calls.
In terms of competition, Smith said that the most direct rival is San Jose, California-based Bunchball which provides its service to publishers such as Hearst, Meredith, NBC and others. Founded in 2005, Bunchball's investors include Adobe and Granite Ventures.
The BigDoor service is used to power the BuddyTV virtual economy service.
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