Badgeville Awarded $12 Million in Fresh Capital

Menlo Park, Calif.-based Badgeville, which is building loyalty programs for everything from media companies to e-commerce and enterprises, has raised $12 million in additional capital to ramp up its business.

As the name indicates, the company is playing around in the gamification space, helping companies increase loyalty and drive engagement through the use of social rewards and analytics.

The round was led by Norwest Venture Partners and El Dorado Ventures with participation from existing investors Trinity Ventures and Webb Investment Network. In total, the company has raised $15 million.

Badgeville CEO Kris Duggan would not disclose the company’s valuation, but said that the funding comes after two seven-figure sales quarters in a row and growth of 40 percent quarter over quarter. He expects the company’s revenues to hit $5 million to $10 million this year.

The capital will be used to grow Badgeville’s team from 30 to 50 employees by the end of this year. It is looking to hire people in sales and marketing, customer service, and product and engineering.

Duggan said that while there are other companies in the space, they aspire to offer a platform that can easily be plugged into any business. “Some companies require lots of customization, and other players offer low-end, do-it-yourself tools. We are right in the middle and don’t require a lot of customization,” he said. “We want to be the Salesforce.com of gamification.”

Some of Badgeville’s customers include Discovery Communications, NBC, Bluefly, Interscope Records, Major League Gaming, Livemocha, Active Network and Deloitte Digital.

Bluefly, for example, is using Badgeville to add game mechanics to its e-commerce site, rewarding shoppers who watch videos, create wish lists, write reviews or read blog posts.

Tim Chang, Partner at Norwest Venture Partners, said gamification is like the modern-day United Airlines mileage program. What he likes about Badgeville is that it is taking a software-as-service approach, which will build a scalable business with recurring revenues.

Other players in the space include BigDoor; Bunchball, which recently raised $6.5 million; Novel, a stealthy Redmond, Wash.-based start-up; and likely more.

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