Interactive ringtone developer Emotive Communications Inc. has acquired mobile game loyalty company Sennari Entertainment Inc. and received $6.25 million in new funding from the venture investors that had previously backed both firms. In a bit of creative dealmaking, to engineer the merger Emotive worked alongside Silicon Valley venture firm Mayfield Fund, which had invested in both startups.
Prior to the deal, Sennari had downsized to four staffers, leaving Mayfield and fellow shareholders UV Partners, Novak Biddle Venture Partners and Blacksmith Capital unlikely to receive a strong exit. Emotive chief executive Anthony Stonefield says Sennari's investors did not receive any liquidity in the deal but instead received stakes in the merged company. Blacksmith already held a stake in Emotive, and Mayfield led the new funding alongside existing Emotive investors D.E. Shaw Ventures and Bertelsmann Digital Media Investments. Early Emotive stakeholder Warner Music Group Corp. [
WMG] did not participate in the new round but still holds a stake.
Emotive has introduced a technology that allows users to "push" ringtones from phone to phone. Stonefield isn't divulging many details about the company's future products but says that Sennari's virtual currency, billing, trading and prize-playing game components will have a role. "We will be more game-like," he says.
Both Emotive and Sennari have been generating revenues, and Stonefield says the likelihood of a Series C round may depend on further acquisition opportunities. The current funding represented a step up from Emotive's $7.7 million Series A round, closed in summer 2007, and Stonefield expects significant revenue growth in 2009.
- Paul BonanosSee press release from Emotive (PDF)
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