Thursday, September 18, 2008

Zynga Still On a Hiring Frenzy and My Rough Estimate of Zynga's Burn Rate

According to a post by Marc Pincus on his personal blog, Zynga is looking to hire 70 more people, which by my rough count would bring Zynga up to ~200 employees.

Using timeworn startup expense math, on average each employee costs about $200,000 a year with salary and benefits.

200 employees x $200,000 = 40 million dollars a year of overhead. That's some major burn rate.

I've heard that Zynga is making about 1 million a month in revenue, but that was back a couple of months ago at Casual Connect. I'm certain that revenue is even higher now that Myspace has become a viable platform. And Zynga has 3 of the top ten Myspace apps. Let's assume it's 2 million a month. That's $24 million annual revenue.

$24 million - $40 million = -$16 million (or roughly half of Zynga's total VC funding).

So if they're planning on running a $16 million annual deficit, and that doesn't take into consideration acquisitions. Either they have some aggressive revenue projections or intentions to raise another round of financing.

Or my math sucks. Which is very possible.

If You are Interested in a Job at Zynga...

Talk to my friend Flo ( over at Zynga. Tell her that I sent you and maybe I'll get invited over to Zynga for those free chef-prepped lunches I've heard about. Hey Flo, do they do vegan? (Yes, I'm a vegan, and yes, I think I'm crazy as well.)