Pixonic, Russia’s ‘little Zynga,’ raises $5 million from Western, Russian and Ukrainian funds

Ambitious Russian social games developer Pixonic has just closed its third round of financing, raising $5 million from Russia’s Kite Ventures, Ukraine’s Take Advantage Venture and France’s Ventech. Founded in late 2009, Pixonic has already launched over 30 games on 13 different social networks.

While already established as one of the leading players on the Russian scene, the company has formed a “Jedi team” and aims to become ”a leading global publisher,” says its website.

Among its hits are Litsemer (Hypocrite in Russian), a flirting game launched in 2010, and Domovyata (Lil’ Brownies in Russian), a game featuring a housekeeper taking care of mystical creatures, launched more recently. Both applications have ranked among the most popular games on VKontakte.ru, the leading social network on the Russian-language Internet.

In December 2010, Pixonic launched an API through which developers from seven countries have released their game applications.

The company also has publishing agreements with Mail.ru, Russia’s main portal and webmail service, and Alawar Entertainment, an important developer, publisher, and distributor of lite games.

Pixonic was initially funded in late 2009 by AddVenture, one of the most dynamic Russian venture funds launched in late 2008. Pixonic’s last round of financing closed less than six months ago. The company then obtained an additional $1 million from Andrey Romanenko, the founder of QIWI, Russia’s leading offline electronic payment system and an investor in AddVenture, reports ComNews.ru.

Pixonic could now be valued between $10 or $12 million, according to one industry expert in an interview with Kommersant, a Russian business daily.

The newly raised funds will be used to launch new games on Russian and international social networks, including Facebook, the company says.

”Five million is an important sum to help Pixonic consolidate its position on the domestic market,” one of the investors participating in the deal told East-West Digital News. “But obviously further rounds of financing will be required to gain significant positions on Facebook.”

Pixonic is managed by Elena Masolova, a co-founder of AddVenture who also launched Darberry.ru, a group-buying site acquired by Groupon in 2010.

Pixonic’s monthly turnover amounts to hundreds of thousands of dollars, but the company has set for itself the goal of making “no less than a few million per month,” Russian business daily Vedomosti quoted Masolova as saying.

A strongly engaged social networking audience

With an average of 9.8 hours per visitor per month, an estimate calculated last October by comScore, Russia has the most engaged social networking audience worldwide. According to J’son & Partners, a management consultancy specializing in the IT, telecommunications, and media markets in Russia and the CIS, as much as 55.3% of Russian users of social networks are expected to play social games by 2015, up from 32.3% in 2009. The market will reach a value of $1.5 billion in 2015 compared with just $105 million for the nascent market in 2009, Kommersant reports.

Ventech is an international, Paris-based venture fund which made its first deal in Russia in 2008, acquiring a stake in WomanJournal.ru, a leading portal dedicated feminine themes now integrated in Web Prime Group. Earlier this year, Ventech took part in the round of financing of Oktogo.ru, a St. Petersburg-based online hotel booking system. In addition, Ventech has a stake in the French Crocus Technology, a world leader in MRAM technologies which recently agreed with Rusnano to launch the first ever production of memory chips in Russia.

Take Advantage Venture is formally based in Luxembourg but operates mainly from Ukraine and the majority of its investors are Ukrainian. The fund focuses on seed and early stage investments in Western and Eastern Europe. Among its first investments is Linguee.com, a German-based startup offering an intelligent online translation service. The fund plans to launch several other projects on the Russian Internet market this year.

Kite Venture, founded in 2008 by Russian businessman Edward Shenderovich, focuses on high tech and Internet investment in Russia. Among its portfolio companies are Darberry.ru, Kanobu.ru, a gaming portal, and AlterGeo, a location-based service inspired by Foursquare, in which AddVenture also owns a stake.

Topics: Finance, Gaming, International, Internet, News, Social networks & apps, Venture / Private equity
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