The announcement dovetails with the conclusion of Telltale's critically-acclaimed Sam & Max: Season 1, a six-episode game series that launched last fall and had monthly releases through May. As the first episodic series with releases on a regular schedule, Sam & Max: Season 1 has emerged as the first truly successful demonstration of episodic gaming for a mass audience—a major milestone for Telltale.

"Digital distribution is changing entertainment, and Telltale is helping define the new landscape," says Telltale's CEO and co-founder Dan Connors. "This funding will allow us to stay on the cutting edge of innovation by building out our team and our tools, and by taking on new licenses for the episodic treatment."

Telltale's funding comes from Granite Ventures and IDG Ventures SF, two San Francisco-based venture firms that focus on early-stage media and technology companies. Andre Blanadet of the advisory firm avanceventures played a critical role in Telltale's funding success.

"We look for experienced teams that are pioneering new technologies and business models in huge markets," says Chris Hollenbeck, managing director at Granite Ventures, who has joined Telltale's Board of Directors. "Telltale has it all—a great group of people who are changing an industry while doing what they love. We look forward to helping them build the next major player in the gaming industry."

"Telltale has one of the best teams we have seen in the gaming market and we are excited to be associated with them," says Philip Sanderson of IDG Ventures SF. "Entertainment software has undergone a radical change over the past few years in terms of development, content and distribution, and Telltale is on its cutting edge."

Of Granite and IDG Ventures SF, Telltale's CTO and co-founder Kevin Bruner says, "We managed to bring together a fantastic set of investors who share our vision of transforming the way people experience games. We're extremely pleased."