Booyah: Accel Picks a Location Startup and Gives It $20M

Booyah, which makes the location-based mobile gaming app MyTown, has raised $20 million in a round led by Accel Partners and including previous investors Kleiner Perkins and DAG Ventures. The company also added Accel’s Jim Breyer, well known for being a Facebook and Wal-Mart (s wmt) board member, to its own board. The Booyah funding comes in the context of a series of progressively richer funding deals and hypothetical deals for other location-based startups such as Loopt, Gowalla and Foursquare.

MyTown, which is to date only available on the iPhone (s AAPL) and iPod touch in the U.S., has 2.1 million users. The Monopoly-like game has gained acclaim for its quick growth as compared to Foursquare and Gowalla. While $29.5 million in total funding might sound crazy for an iPhone app, Booyah carries a lot of cred because of its management’s background designing games for Blizzard Entertainment (s ATVI). The company brags that MyTown users already spend 70 minutes per day with the app.

Booyah CEO Keith Lee said his strategy is to go “beyond the check-in” — meaning the now-standardized activity of users actively registering their current location at a venue by using the GPS on their phone. “I think people are fighting in this red ocean for check-ins,” he said. “You have Facebook coming in — that’s gg right there.” (gg is gamer speak for “good game,” aka game over.)

At first the MyTown app wasn’t particularly strict about location fidelity, allowing users to check in at venues they were nowhere near (which might be fun and addictive, but doesn’t carry the same weight as users telling their friends they are actually at a certain bar by checking in on competing services). Booyah has since ratcheted down check-in fidelity and Lee said his team will soon try to nail down the relationship between a customer and a business even further. Lee said he expects to use indicators like UPC and QR codes, RFID tags, and the Open Graph from Facebook to authenticate that a user is actually in a location and/or has performed a certain activity.

Generally speaking, the problem with making a social web product more strict and tied to real life is that it’s hard for new users to get engaged when they don’t know anybody on the service. Lee said that his team’s special sauce, coming out of working on World of Warcraft, is creating worthwhile experiences for those new users and for ones who only want to play for a few minutes.

Lee said that he expects MyTown to be Booyah’s flagship franchise indefinitely, but to expect other future projects as well as the release of a platform upon which to build location apps. (MyTown wasn’t actually the company’s first app; its previous major app, Booyah Society, had much less success.)

MyTown monetizes through virtual goods, location-based advertising and brand partnerships, though Booyah only recently hired its first salesperson to handle inbound inquiries for the app. The Palo Alto, Calif.-based company has just 24 employees, and Lee said one of the main ways he’d be spending the new funding is to hire great talent.

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