Amazon founder Jeff Bezos has invested $3 million into user-generated casual gaming site Kongregate through Bezos Expeditions, his personal investment vehicle. Kongregate CEO calls it a “super angel round,” although technically it is a B1 round (the startup raised $5 million in a round led by Greylock). Bezos Expeditions won’t be taking a board seat. Greer says:
If we had done another venture round, we would have had to raise $12 million to $15 million [to satisfy
currentthe target equity stake that would be required by new VC investors]. We don’t need that to get to profitability. We still have $6 million in the bank of what we’ve raised so far, including Bezos’ money.
He really didn’t need the money, but when Jeff Bezos wants to invest in your a startup on good terms, you’d be crazy to say no. (LinkedIn founder Reid Hoffman, also an investor in Kongregate, made the introduction to Bezos). Greer says the process was very efficient. He flew up to Seattle and had one meeting with Bezos and his investment team. Greer explains why he thinks Bezos invested:
He looked at it the way he looks at the Amazon seller business. Amazon is a better place to sell your stuff than on your own site, and Kongregate is a better place to host your games. Community is really important. He said you should really consider developers your customers to the same extent that you consider players your customers. That was his big emphasis.
Kongregate lets anyone create their own Flash video games and splits revenues with game creators, starting at 25 percent of any associated advertising, up to 50 percent. ComScore shows 1.7 million global unique visitors in March (see chart below), with the average user spending 82 minutes per month on the site. (The company claims 3 million worldwide uniques and 349,000 registered hardcore users). The video above is one we shot of Greer at the Crunchies awards earlier this year, explaining what Kongregate does. (The figures he cites at the end of video of 2800 games and 1.5 million visitors are outdated, and now would be 4,200 and 3 million respectively, on an apples-to-apples basis. And only 63 million games have been played in total, not the half a billion he states in the video).
Greer also has a Facebook strategy up his sleeve which he plans to unveil next month. Kongregate will start launching the most popular games as standalone Facebook apps, starting with Dolphin Olympics, Jump Cat, Super Crazy Guitar Maniac, Ragdoll Avalanche, M.A.D, and Filler. (See exclusive screen shots below).