Watercooler Raises $5.5M More for Sports-Themed Social Games

Sports application developer Watercooler has raised a second round of funding, as it continues its push into sports-themed social games. The $5.5 million round was led by strategic investor Betfair, a United Kingdom-based conglomerate that runs a variety of sports betting services around the world. Previously, the company had raised a $4 million round from venture firm Canaan Partners.

In this case, though, the Betfair appears more interested in being part of the non-betting market of social network applications, as most forms of online sports gambling are illegal in this country. Canaan Partners also participated in this round, following the $4 million it had previously invested in the company.

“Betfair’s innovative approach to sports and gaming, along with its strong international presence, made the company a perfect fit as we continue to build innovative social games,” said Watercooler chief executive Kevin Chou. So perhaps the company is looking at some form of international expansion?

Watercooler offers hundreds of applications for individual sports teams, as well as tournament games like 2009 Bracket Challenge. Built for the March Madness college basketball tournament earlier this year, that app gained 1.7 million monthly active users at the time. Watercooler has since followed up with the FanSection Fantasy Football 2009 app for the pro (American) football season this fall, which is monetizing through paid premium features.

The additional money and expertise from Betfair could help the company expand its paid services, as the strategic investor generated says it generated nearly $500 million in revenue in its last fiscal year. It currently has 2.5 million registered users around the world and conducts 6 million transactions a day.

In January, Betfair entered the US online gaming market when it bought TVG, a company that runs a large horse-race gambling site and television network, for $50 million.