Why Social Gaming Network Got $15M in Funding

What began last March with Warbook, a no-frills Facebook fantasy strategy game first conceived by an intern, has lead to today’s announcement: Social Gaming Network, a startup still based in a Palo Alto garage, is getting $15 million in Series A funding from a VC team comprised of Greylock Partners, Founders Fund, Columbia Partners Capital and Novak Biddle Venture Partners. Originally incubated at the Novak Biddle and Columbia-backed Freewebs, where Warbook was first developed during a hackathon session, SGN now boasts a small library of casual game titles which claim an aggregate of one million daily players and 50 million installs in Facebook.

This influx of cash comes at a moment of fierce consolidation and competition in the social gaming space, with SGN and rivals like Zynga and Rock You jostling for dominance. Last week I had a chance to chat with SGN CEO Shervin Pishevar, and got a glimpse at some of the company’s future battle plans.

While Social Gaming Network’s low-graphics games aren’t likely to be confused with a next-gen title, he told me, they’re successful enough. “Small is the new big, right?” Games like Warbook can be made with a low budget, he noted. “Even having a 100,000 daily active users is good revenue.” (At peak usage with a sponsorship deal, he said, Warbook was making $100,000 a month.) “We’re much more about engagement and retentions than virality,” Pishevar told me.

Over the next few months, Shervin Pishevar and his small team will be working on several top secret games that’ll leverage advertising and virtual item sales for revenue. While still relatively low budget, he’s working with developers to give these new titles more polish. The goal, said Pishevar, is to transform Social Gaming Network into “the Pixar of social games.” Whether that’ll enable them to dominate this space remains to be seen, but $15 million in the bank is a potent advantage.