hi5 Closes $14 Million Round to Help It Conquer the Social Gaming Market

With the social networking market pretty much obliterated by Facebook, everyone else is looking for ways to reinvent themselves. For global social network hi5, social games are now the focus and the site has been undergoing several changes in order to transform it into a gaming Mecca. But all of these changes require money, which hi5, luckily, has managed to acquire through a funding round, led by Crosslink Capital, which netted it $14 million in investment money. Jim Feuille, a General Partner at Crosslink, will also join the hi5 board of directors.

"hi5 is among the companies leading and defining the rapidly emerging social entertainment category, and this round will enable us to fully capitalize on what is already a massive market opportunity," Bill Gossman, CEO of hi5, said. "Crosslink has been at the forefront of this revolution with investments in Pandora and Like.com as well as successful public market experience with Omniture and Ancestry.com, so we are thrilled to have Jim's expertise joining the company."

This is the second round of funding for the company. The first round closed in 2007 and was worth $20 million. Now, four years later, the company has raised an additional $14 million, bringing the total sum to $34 million in funding from venture capital firms. This latest round was led by Crosslink Capital with previous investors, like Mohr Davidow, also contributing.

Last year, hi5 introduced a revamped site with a clear focus on games, like the company had announced previously. Central to the new website is its virtual currency which can be used in games but also for virtual gifts. Earlier this year, hi5 also acquired gaming company Big Six to bolster its gaming and virtual currency platform

The hope is that the move towards gaming will prove profitable for hi5. Already, the company says it has seen a great interest in the gaming section of the site which now attracts a significant percentage of the total traffic.