Badgeville Levels Up With $25M From InterWest & More To Gamify Enterprise

When Badgeville launched at TechCrunch Disrupt San Francisco back in 2010 and took home the “Audience Choice Award,” its mission to help companies big and small leverage gamification elements like leaderboards, badges, leveling-up, experience points, etc. to increase customer engagement seemed intriguing — if not a little gimmicky.

Fast forward to today, and some may still cringe at the word (and its overuse), gamification is reaching the tipping point. As Mayfield Fund Managing Director Tim Chang recently wrote in a must-read post, gamification is now moving beyond its early adopting verticals, like media and fitness, and is no longer content to just play in the realm of consumers and end users. It’s ready to play in enterprise.

Badgeville’s vision of a web and business experience being re-shaped by game dynamics is not only being validated by the media, but by investors, too. Earlier this month, mobile gamification startup SessionM raised $20 million from Charles River Ventures, Highland Capital Partners and Kleiner Perkins Caufield & Byers, among others. And today, Badgeville is leap-frogging SessionM, announcing that it has closed a $25 million round of series C financing.

The startup’s new investment was led by InterWest Partners, with participation from previous investors like Norwest Venture Partners, El Dorado Ventures, and Trinity Ventures, bringing Badgeville’s total funding to $40 million — all of which has been raised in the 20 months since its launch at Disrupt SF. As a result of the round, InterWest Partner Doug Pepper will be joining the startup’s board of directors.

So why all the hubbub? Among other things, Badgeville is capitalizing on the fact that gamification continues to represent a growing portion of enterprise social initiatives — doing so by giving businesses and corporations an embeddable gamification platform that focuses on proving real engagement. You know that “consumerization of enterprise” thing everyone’s talking about? Gamification is a part — or partial catalyst — of that. It won’t be long before everyone’s talking about the “gamification of enterprise.” (You heard it here first.)

After all, Gartner Research estimates that more than 70 percent of “Global 2000″ organizations will have a gamified app by 2015. M2 Research has drunk the same Kool-Aid, reporting that the gamification market will reach $2.8 billion in the U.S. by 2016.

Riding this trend, Badgeville wants to help enterprise understand and influence user behavior across platforms by speaking its language with a cloud-based Platform-as-a-service (PaaS) solution. The scope of the startup’s platform is also wide, compatible with a range of industries from retail and healthcare to education and financial services, bringing its database into traditionally private cloud environments by offering enterprise-grade security and scalability.

With that value proposition, Badgeville has attracted more than 165 global clients (up from 100 in January), which include Oracle, EMC, Dell, Samsung, NBC, Fox, Ford, and Disney to name a few. Using its “Behavior Platform” to identify user behaviors across a company’s network, allowing them create rewards in their enterprise apps, the startup built customized gamification integrations with companies like Yammer, Bazaarvoice, Klout, and Sharepoint, in addition to those for Salesforce.com and Jive which are currently in private beta.

Badgeville also claims to have launched the industry’s first ISV program, enabling companies like Oracle, Kaiser Permanente’s Avivia Health, and Saba to embed Badgeville into their core technologies. If building significant integrations and inroads into the services of companies like Oracle isn’t enough, the startup is also building a defensible position in terms of its own IP, having received patents for its Behavior Engine, Dynamic Game Engine, Reputation Mechanics, and Social Mechanics.

As to the level of engagement Badgeville is creating for its clients, Co-founder and CEO Kris Duggan says that clients have seen an average 500 percent increase in user comments, 140 percent growth in time spent on the business’ website, 60 percent increase in employee engagement, and an 80 percent jump in user registrations.

While Badgeville doesn’t share the cost of its offerings, as pricing fluctuates based on the implementation, audience size, among other things, entry-level prices typically start out at $3K to $5K per month. This may not meet the budgets of smaller companies, as you have to pay more to get more, but for enterprise the bill seems to fit.

Badgeville has grown its team to 70 and will continue to invest in human capital as well as its own technology. The startup’s growth, reflected in other gamifiers like Bigdoor, Bunchball, and SessionM shows that gamification has plenty of market opportunity (and opportunities for marketers), is moving beyond the early crush on easy features like badges, and will likely be coming to an enterprise near you sometime soon.

For more on Badgeville, check ‘em out at home here.