Investors Pump $148.5 Million Into 12 Virtual Worlds Companies In Q3

While VC firms like Sequoia Capital prep their startups for leaner days, and the WSJ says that marketers are planning to cut back spending on “experimental” ad buys, a group of virtual worlds companies has nearly $150 million to burn. Virtual Worlds Management reports that a dozen virtual worlds-related companies received $148.5 million in funding in Q3, bringing the total amount invested in the space this year to over $493 million. Kid-friendly worlds were definitely a focus, as more than half of the deals (worth more than $36 million) were with companies that had either launched or were set to launch youth-facing properties; but it will be interesting to see if the same level of investment is sustained in the coming months.
Notable deals: SF-based Gaia Online picked up $11 million in a third round led by Institutional Venture Partners. All told, the teen hangout has raised over $32 million since 2006. Hollywood Interactive Group snagged $5 million in a first round led by BlueRun Ventures. The company launched, a celeb- and entertainment-themed world for women, in June.
Ukash, an electronic payment provider (a la PayPal) picked up a $14.4 million investment from Gold Cash Investments (a subsidiary of Blue Label Telecoms) and DataCash. The U.K.-based company works with a number of virtual worlds, including Habbo Hotel and Stardoll.
Biggest deal: MMO and virtual world developer Trion World Network was the biggest winner, picking up $70 million in a third round. The Redwood City, CA.-based company is using the funds to develop a new MMORPG and a virtual world-TV show hybrid with The Sci Fi Channel, per Virtual Worlds News.