Virtual Goods News

Today an SEC filing revealed that LiveGamer had raised a $2.8 million round of funding from undisclosed backers, including existing investors, shortly before its acquisition of TwoFish announced earlier this week. LiveGamer refers to the round as "side car" financing. Prior investors in LiveGamer include Charles River Ventures, Kodiak Venture Partners, and Pequot Ventures. This is the first round of new funding for LiveGamer since its inaugural $24 million round of investment in 2007.

LiveGamer went into business to try and provide MMORPG publishers with safe, sanctioned ways for players to buy and sell valuable in-game virtual items with each other for real money. Most subscription MMORPGs do not allow this practice, resulting in a thriving grey market that can cause publishers financial headaches thanks to credit card fraud and chargebacks.

According to LiveGamer CEO Andrew Schneider, clients began to express interest in having wider ranges of virtual economy services provided to them along with LiveGamer's expertise in player-to-player secondary markets. This drove LiveGamer's acquisitions of Korean payment provider N-Cash and analytics firm TwoFish. It is unknown what, if any, role the second round of funding played in LiveGamer's acquisitions. The side car round contains an unknown percentage of debt and other types of securities in an unknown ratio.