RockYou, the maker of applications such as SuperWall and Likeness that ride on top of social networks, has raised $35 million in a round of venture funding led by DCM. We confirmed with a company spokesperson that previous investors Partech, Lightspeed and Sequoia participated in the round. San Mateo, Calif.-based RockYou had previously raised $10 million-$15 million, she said, though she declined to confirm a specific amount.
The $35 million likely brings RockYou’s valuation under fellow widget maker Slide‘s, which was $550 million in its last $50 million round from two private equity funds. It’s also less than a reported $50 million-$70 million on a $400 million valuation that RockYou was supposedly seeking. An insider spun this difference in valuation with Slide as a positive thing, though, telling us it would make RockYou a more digestible acquisition target.
Competition is fierce between the companies; in our experience it’s impossible to interview RockYou CEO Lance Tokuda without him carrying on about Slide. Though some of his points seem valid — Slide execs have admitted some of their products and features were inspired by competing with RockYou. However, Slide has CEO Max Levchin’s impeccable PayPal pedigree, whereas RockYou’s founding was tied up in a lawsuit claiming that Tokuda and cofounder Jia Shen stole the idea from their former employer, Iconix (it was settled out of court).
RockYou says it has 87.5 million monthly uniques and 2.7 billion page views across its network. It’s impressive reach, but along with that comes impressive infrastructure costs. The company’s justification for the new funding isn’t terribly specific — it said it wants to hire, expand advertising and publisher offerings, and add more applications (BTW Slide apparently said it’s done adding new Facebook applications). In terms of anticipating and fine-tuning what it’s audience wants from its products, I’d give RockYou the upper hand, but making money may take a different skill set. The plan is “building brand awareness and loyalty” by tapping into engaged young users.