Dan Primack

The latest on private equity, M&A, deals and movements — from Wall Street to Silicon Valley

Sequoia backs online game bundler?

April 22, 2011: 4:24 PM ET

Humble Bundle, an innovative distributor of online games, has raised over $4.7 million in venture capital funding, according to a regulatory filing.

Sequoia Capital would seem to be the lead investor, given that Sequoia partner Alfred Lin (former CFO/COO at Zappos) is listed as the company's only outside director. I spoke very briefly yesterday with Humble Bundle co-founder John Graham, who neither confirmed nor denied Sequoia's involvement. He simply asked me to send questions via email, but has not yet replied.

While we wait...

Humble Bundle chooses several games to package together, and then offers the "bundle" to users as a single download. Users get to name their own price, and even allocate percentages of their payment to the specific game developers or select charities. Bundles only last for a limited time, but come free of digital rights management (DRM) restrictions.

The first bundle included five games, including World of Goo (developed by 2D Boy) and Luguru (developed by Wolfire Games, where Graham and fellow co-founder Jeff Rosen both also work). A second package launched last December, while the most recent one came out last week featuring five offers from a Finnish game developer called Frozenbyte.

According to a counter on its website, Humble Bundle has generated over $730,000 in sales on 147,000 bundles ($4.96 per bundle). Linux users pay the most at $11.72 per bundle, Mac users are in the middle at $6.31 and Windows users bring up the rear at $3.95.

The big question, of course, is how Humble Bundle itself plans to make money. Buyers can "tip" the company when making purchases, but clearly that isn't the business model. Perhaps they'll take a cut from the developers (or perhaps do already), and expand into mobile and console games. Or maybe the bundles are just a way of proving out the upload/download technology.

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About This Author
Dan Primack
Dan Primack
Senior Editor, Fortune

Dan Primack joined Fortune.com in September 2010 to cover deals and dealmakers, from Wall Street to Sand Hill Road. Previously, Dan was an editor-at-large with Thomson Reuters, where he launched both peHUB.com and the peHUB Wire email service. In a past journalistic life, Dan ran a community paper in Roxbury, Massachusetts. He currently lives just outside of Boston.

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