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Playing the Funding Game -- SGN Gets $130 Million From Korea's Netmarble

It's a global mobile market now.

Myspace founder Chris DeWolfe said he had one main reason that his mobile gaming company, SGN, took $130 million in new investment from Korea’s Netmarble Games.

“If you are in gaming today, you need to think about things in a global way,” he said in an interview. “I don’t want to be a mid-tier player, so you have to make a bold move.”

DeWolfe gave no valuation for SGN, founded four years ago, nor would he say what size stake — except for becoming the largest sharegolder — Netmarble gained for its giant pile of money. He added that SGN would operate separately from its new funder.

Chris DeWolfe of SGN
Chris DeWolfe of SGN

But he said SGN was on track to garner just under $300 million in revenue this year. It currently has about 200 employees in Los Angeles, as well as San Francisco, Palo Alto, San Diego and Buenos Aires.

It previously raised a total of $28 million from DeWolfe himself and others, as well as Austin Ventures. DeWolfe said he talked to a number of gaming companies, as well as private equity investors, but thought a strategic investment from an Asian company was critical.

“Having a partner in Asia is key in this fast-changing, global market,” he said.

DeWolfe said he would use the new funding for three key areas: Acquisition of smaller gaming companies, office expansion and more television and online advertising to attract a bigger audience.

As part of the deal, Netmarble will use SGN’s distribution in the U.S. to expand its own offerings. It makes a number of games, including Marvel Super Fight. Netmarble has 2,500 employees worldwide.

Both Netmarble and SGN operate in the free-to-play market, by pulling in users and then selling in-app goods and upgrades. There is some consideration of adding advertising to the mix, but that is still in the nascent stages.

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