Over the past 24 hours, two of the largest Facebook application developers, RockYou and Zynga, have announced relatively large funding rounds. RockYou raised a whopping $50 million and Zynga raised $15.18 million. What are these rounds going toward? RockYou is apparently turning their attention toward the booming social gaming space and expanding their advertising efforts, while Zynga is most likely stocking up on cash to help build out their ever expanding portfolio of popular games.
Despite the ongoing controversy surrounding the offers space, both companies have rapidly increasing revenue bases. Zynga has revenues of somewhere between $150 million and $240 million depending on what source you listen to, while RockYou revenues are rumored to be between $30 and $40 million. RockYou has raised an incredible $119 million to date which means the company will have to dramatically increase revenue over the next couple years if the investors are going to obtain a significant return on their investment.
Both companies have come under fire for the ads running in their network, however they both appear committed to cleaning things up. While this RockYou investment appears to be a significant doubling down by their existing investor, Softbank, it’s not a completely outlandish investment given that RockYou is one of the leading brands on the social web. We’ll have to wait to find out what RockYou will be using this funding toward but I’d expect at least a couple new applications out of this round of funding.