Visa Gets into Games with $190M Purchase of PlaySpan

Extending its reach into in-game commerce, Visa has agreed to buy VC-backed PlaySpan for $190 million.

Founded in May 2006, PlaySpan previously raised $46.25 million from more than half a dozen investors, including Easton Hunt Capital Partners, Menlo Ventures, Novel TMT Ventures, Softbank China & India Holdings, Source Ventures, STIC Investments, Vodafone Ventures, ZAD Global Fund I and various individuals, according to Thomson Reuters (publisher of peHUB).

The Santa  Clara, Calif.-based company raised $4.95 million in a Series A in 2007, $23.3 million in a Series B in 2008 and $18 million in a Series C last year, according to Thomson Reuters. Valuations for the rounds were undisclosed.

The company used some of its capital for acquisitions. It acquired Internet Payment Solutions for an undisclosed amount in 2008 and Spare Change for an undisclosed amount in 2009, Thomson Reuters reports.

PlaySpan provides in-game search, commerce and micropayment technologies that enable game publishers and developers to generate new revenue, acquire new users and build brand loyalty. Its primary competitors are Fatfoogoo, Gameforge, LiveGamer, Mochi Media, Open Network Entertainment, Player Auctions and Sauma Technologies, according to Thomson Reuters.

PRESS RELEASE:

SAN FRANCISCO–(BUSINESS WIRE)–Visa Inc. (NYSE: V) today announced an agreement to acquire PlaySpan Inc., a privately held company whose payments platform handles transactions for digital goods in online games, digital media and social networks around the world. The acquisition of PlaySpan complements Visa’s 2010 CyberSource acquisition and extends the company’s capabilities into one of the fastest-growing segments of eCommerce – digital and mobile commerce.

PlaySpan provides a Monetization-as-a-Service™ platform that allows merchants to monetize their content using a broad suite of payment and commerce-related solutions in fraud and risk management, analytics, merchandizing and global payment connectivity. Merchants use PlaySpan’s technology to enable their consumers to make safe and convenient purchases online for items such as game credits, premium memberships and digital goods.

Last year, global eCommerce sales reached an estimated $948 billion1 and they remain a significant growth opportunity for Visa. Approximately 45 percent2 of U.S. online spend takes place on Visa’s network today. For Visa’s fiscal first quarter 2011, the company reported 25 percent year-over-year growth in eCommerce payment volumes globally.

Within the eCommerce category, PlaySpan is a leader in the relatively new segment of digital goods, which generated an estimated $25 billion in consumer spending globally in 2010, a figure expected to reach $280 billion by 20143.

Visa will pay approximately $190 million in cash, plus additional consideration for performance milestones. PlaySpan is based in Santa Clara, California. The acquisition is expected to be completed in Visa’s fiscal second quarter 2011, pending satisfaction of customary closing conditions including regulatory approvals. The acquisition is expected to be slightly dilutive to Visa’s earnings per share in its fiscal year 2011 ending September 30, 2011.

PlaySpan is backed by top-tier venture funds including Easton Capital, Menlo Ventures, Novel TMT Ventures, STIC Investments, Silicon Valley Bank Capital, Softbank China & India, TimeWarner Investments, Vodafone Ventures and GE Asset Management.

About Visa

Visa is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world’s most advanced processing networks—VisaNet—that is capable of handling more than 20,000 transaction messages a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit www.corporate.visa.com.

About PlaySpan

PlaySpan is the trusted partner in global monetization solutions for leading publishers and developers of digital media, online games, mobile apps and social networks. Its patent-pending in-game digital goods commerce and Monetization-as-a-Service (MaaS)™ platform enables publishers and developers to generate new revenues, acquire new users, and extend the loyalty of existing users.

It provides a global payments solution through its UltimatePay product, which enables users to make safe, convenient and friendly in-app purchases using over 85 global payment methods in 180 countries. UltimatePay includes PlaySpan’s Ultimate Game Card®, the #1 selling multi-game prepaid card, available in more than 50,000 retail locations across North America and a growing list of countries worldwide.

PlaySpan is headquartered in Silicon Valley, with offices in Ohio, Virginia, and Mumbai. Investors include Easton Capital, Menlo Ventures, Novel TMT Ventures, Silicon Valley Bank Capital, STIC, Softbank, Vodafone and GE Asset Management. The company has won over 13 awards during the past three years. It was honored as one of the 2010 OnMedia Top 100 and AlwaysOn Global 250, its CEO won the 2010 E&Y Entrepreneur of Year Award for Northern California, and it was named to Business Insider’s Digital 100 for 2010.