Zynga

Zynga makes social and mobile games. Mark Pincus founded it in April 2007 as Presidio Media with Eric Schiermeyer, Justin Waldron, Michael Luxton and Steve Schoettler, and it was renamed Zynga that July after Pincus's American Bulldog. Its first Facebook title, Texas Hold 'Em Poker, launched in July 2007. FarmVille launched in June 2009 and reached 10 million daily active users within six weeks. The company was based for years in San Francisco's South of Market district and moved to San Mateo in 2022. At the IPO it reported 54 million average daily active users as of September 30, 2011.

Zynga raised $10 million in January 2008 and $29 million in July 2008, then $490 million in a February 2011 Series C, for $854 million across three rounds. The IPO prospectus shows who held stock: KPCB Holdings (Kleiner Perkins, 11.2 percent), Institutional Venture Partners XII (6.1 percent), Foundry Venture Capital 2007 (6.1 percent), Avalon Ventures VIII (6.1 percent) and entities affiliated with Union Square Ventures (5.4 percent) were 5 percent holders. Google, Silver Lake Partners, DST USA, Mail.ru Group and Tiger Global Private Investment Partners V were also selling stockholders. Reid Hoffman and Bing Gordon were on the board. The prospectus reports that Zynga issued 34.9 million Series C preferred shares in 2011 for net proceeds of $485.3 million. In the same period it repurchased $283.8 million of its own stock, which provided early liquidity to existing holders.

Zynga priced its IPO at $10.00 per share on December 16, 2011 and listed on Nasdaq as ZNGA. It sold 100,000,000 Class A shares for $1 billion in gross proceeds, and the stock closed its first day down 5 percent. Revenue grew from $19.4 million in 2008 to $597.5 million in 2010, and was $828.9 million in the first nine months of 2011. After a long decline from its IPO price, the company changed CEOs several times. Frank Gibeau took over in March 2016 and pursued acquisitions including NaturalMotion ($527 million), Small Giant Games ($560 million), Gram Games ($250 million), Peak ($1.8 billion) and Rollic ($180 million). Take-Two Interactive announced on January 10, 2022 that it would acquire Zynga for $12.7 billion, or $9.86 per share. The deal closed on May 23, 2022.

For venture investors Zynga is a case of fast growth and early liquidity. Avalon, Foundry, Union Square Ventures, Kleiner Perkins and IVP were in early, and Zynga went from founding to a $1 billion IPO in under five years. The late private round and the share buybacks let some holders sell before the listing. Public investors had a different result: the Take-Two price of $9.86 per share was below the $10 IPO price more than ten years later. The returns came from the private rounds, not from holding the public stock.