Zynga Raises $6.3M, But from Whom?

Zynga Game Network, the maker of popular social networking games such as Farmville, has raised $6.3 million in equity, according to a Form D filed with the SEC today.

The filing shows that three investors participated in the funding, but it did not name any of them.

The capital is unlikely to be from new people, since the filing shows that the external board composition did not change, says Robert Hunt, founder of FormDs.com, an analytic service.

Under the “related persons” section of the filing, Zynga’s non-executive directors are listed as Brad Feld of Foundry Group; William Gordon of Kleiner Perkins Caufield & Byers; and Reid Hoffman of LinkedIn (and a GP at Greylock Partners).

Based on the fact that “business combination transaction” box was checked, the capital could have come from Zynga’s acquisition of a company with cash on hand, such as a VC-backed company, Hunt says.

“By checking that box, it suggests that this is a  non-standard filing,” Hunt says. For example, that box was not checked in Zynga’s Form D filing for a $15 million round in November 2009. But, to add to the confusion, the “business combination transaction” box was checked on Zynga’s Form D for the $20 million round it raised in June.

One final note: It appears that Zynga needs to read the SEC guidelines for Form Ds a little more closely with regard to clarifying the business combination section of the form. The SEC guidelines for Form Ds state in part:

“Indicate whether or not the offering is being made in connection with a business combination, such as an exchange (tender) offer or a merger, acquisition, or other transaction of the type described in paragraph (a)(1), (2) or (3) of Rule 145 under the Securities Act of 1933. Do not include an exchange (tender) offer for a class of the issuer’s own securities. If necessary to prevent the information supplied from being misleading, also provide a clarification in the space provided.” 

Seems like this would have been a good opportunity for Zynga to provide a clarification to “prevent the information supplied from being misleading.”

We’ve sent in a media request, asking for more details. We’ll update this post when we hear from the company.