Augmented by its founder’s vision of the upcoming era of “social computing,” mobile game publisher Digital Chocolate on Wednesday announced it has secured $22.5 million in Series C funding.

The cash comes as the firm captures a small-but-growing segment of game downloads in the United States, with offerings at least one analyst views as strong enough to give the company continued traction.

New Digital Chocolate backers include Bridgescale Partners, Outlook Ventures, Montagu Newhall Associates, DN Capital, Glynn Capital Management, and CHI Capital. Returning investors include Kleiner Perkins Caufield & Byers, Sutter Hill Ventures, and Chengwei Ventures.

Since forming in 2003, the company has collected nearly $44 million.

“Our momentum is continuing,” Digital Chocolate CFO Cheryl Dalrymple said. Ms. Dalrymple remained tight-lipped on details of how the new funding would be spent, saying only that it would be used toward growth opportunities in both local and social applications.

Mobile Buzz

The mobile game sector has received a lot of attention lately, most notably from Electronic Arts’ December purchase of segment leader Jamdat (see EA Buys Jamdat for $680M).

Digital Chocolate’s announcement is further proof of investor confidence in the sector, according to M:Metrics senior analyst Mark Donovan. More specifically, it indicates greater interest in Mr. Hawkins’ vision for mobile games.

“Mobile is the social computer,” Mr. Hawkins told attendees at last month’s Video Game Investor Conference in San Francisco. During the conference, he discussed one of the company’s upcoming social games, dubbed “The Hook-up,” in which players create digital characters, or avatars, and participate in fantasy dates with other mobile users (see Teen ‘Hook-up’ Game Planned).

The event’s two main themes included connectivity and the burgeoning casual games market, a genre that extends to mobile phones (see Game Investors Tout the Net; Game Execs: Casual Is King).

Digital Chocolate has seen success with non-social titles like Tower Bloxx and Bubble Ducky. But according to M:Metrics, the company had a mere 2.3 percent of game downloads during the first quarter of 2006, putting it well behind market leader EA Mobile’s 28.8 percent. In fact, the company comes in a distant ninth after firms such as Glu Mobile (9.9 percent) and Gameloft (9.1 percent).

Growing Popularity

But Digital Chocolate’s mobile games are growing in popularity. According to Mr. Donovan, during the first six months of 2006 the company rose to seventh from 13th place in terms of publisher promotion and placement among phone carriers.

While Mr. Donovan doesn’t see Digital Chocolate ballooning to become the biggest player in its sector anytime soon, he believes the company is making a place for itself. “It’s clear they’re carving a substantial niche,” he said.

Contact the writer: ROlson@RedHerring.com