Online game startup Tiny Speck raises $10.7M from Andreessen Horowitz and Accel

Tiny Speck said today it raised $10.7 million in the second round of funding for its online game business from Andreessen Horowitz and Accel.

The company is also launching an invite-based beta test of its social online game, Glitch, next week. The fact that the company has attracted considerable funding from marquee venture capital firms shows that the game market, particularly online social games, is still a hot category. While some are calling this a bubble, the number of success stories — from Zynga to Ngmoco — is high and it’s inspiring more money and more entrants to come into the market.

Tiny Speck is headed by Stewart Butterfield, who is known for creating photo-sharing site Flickr with his wife Caterina Fake. Yahoo bought Flickr in 2005 and Butterfield created Tiny Speck with a number of core employees from Flickr, including Cal Henderson, former head of engineering at Flickr.

Glitch is a zany massively multiplayer online game “with a very social undercurrent” that will debut on Tiny Speck’s web site. In the game, there are 11 giants “who thought of funny things until their thinking came alive.” You play beings inside their thoughts and your task is to make them bigger.

In an interview, Butterfield said that raising the money was relatively easy, particularly since Andreessen Horowitz and Accel have supported the company from the start. He said that the game is taking longer to make than the usual social game, but he said that Glitch is much more ambitious than other games as a social game world.

“Ours is more of a quest for self-identity, with richer and deeper game play,” he said.

Butterfield said that developers can actually tap into the services Glitch enables via a set of applications programming interfaces (APIs) to build game add-ons or new games.

Butterfield said the company started its first alpha testing of Glitch a year ago. Hundreds of features have been added or trimmed during that time. There are 85 different skills and hundreds of different items in the game. There are also thousands of locations for players to explore.

Tens of thousands of people are waiting in a queue to test the game. Butterfield said the investment allows Tiny Speck to move faster in developing the unique game world and the technology infrastructure behind it. He said the company is hiring and wants to get in touch with independent game developers. The company has 22 employees.