Facebook parent company Meta has been under increasingly intense regulatory scrutiny over the last few years, but that hasn't deterred it from making strategic investments in businesses it sees as complementary to its own.

• One example of that, previously unreported: Meta invested $40 million in Japanese mobile gaming company Playco earlier this year, Axios has learned.

Why it matters: Facebook's user base shrunk (a tiny bit) for the first time ever last quarter, but Meta's apps remain some of the largest social networks on the internet. That's meaningful to a company like Playco, which wants to be on as many popular platforms as possible.

• The deal also reunited two old friends — Facebook and Justin Waldron, co-founder of Playco and Zynga. The latter company's FarmVille game rose to mega popularity as one of the first to be built within the social network. (Meta confirmed for Axios that it invested, while Playco declined to comment.)

The big picture: Playco, founded in 2020 by Waldron, Game Closure co-founder Michael Carter, and game producers Takeshi Otsuka and Teddy Cross, bills itself as an "instant gaming" company.

• In September of that year, it raised a $100 million Series A round at a valuation just north of $1 billion co-led by Sequoia Capital and Josh Buckley. Nine months later it released its first pair of games, built for video chat app Zoom. One is based on Ellen Degeneres' Heads Up! game, and the other is a question-and-answer icebreaker called Ask Away.
• "It’s designed to play quickly while waiting for others to join a work meeting, as an icebreaker with fresh faces, and even to deepen relationships with lifelong best friends," Waldron told Axios at the time.
• Playco has since released games on such other platforms as TikTok and acquired Goodboy Digital, a maker of an HTML5 game engine, one of the technologies it views as key to making games quickly accessible.

Between the lines: In some ways, Playco is a bit of a "Zynga 2.0," given the shared belief in social games that can be easily accessed.

• "It’s very difficult to get two people into a single game in the App Store," Carter previously told TechCrunch of the problem Playco is addressing.
• "We're on an operational mission of trying to build a game that more than a billion people play," Carter told Protocol last year. "So right now we're very, very committed to distribution platforms that can achieve very, very, very large audiences."
• So unlike Zynga's Facebook history, Playco is multi-platform, wherever social networks may be.

The bottom line: Meta might be feeling the heat from a growing number of critics, but some companies are still finding value in taking its money and partnering up.

Besides Playco, Meta’s made a slew of other investments over the last two years, as part of its main corporate activities or housed in its New Product Experiments (NPE) division.

Between the lines: In all cases, Meta’s investments are in companies that align with technology and products it views as part of its future or with initiatives that it’s working on.

• While not unique, it stands in contrast to some corporations that have VC arms primarily focused on financial returns (think Alphabet’s GV, for example).

NPE: The division was set up for Facebook to experiment with new apps and projects like the Clubhouse-esque Hotline, and meme app E.gg, and in 2020 it set up a venture investing operation.

• But NPE has since shifted to a more international focus and to products aimed at such underserved groups as women and people of color. The three-person investing team, led by Sunita Parasuraman, deploys funds to early-stage startups tackling important challenges faced by those groups.
• The only investment NPE has disclosed so far is Inworld AI, which is developing “brains for virtual characters.” Meta participated in Inworld’s $7 million seed round in December alongside Kleiner Perkins and CRV.

Meta: Facebook’s parent company is similarly making investments into businesses already developing tech that complements its own product pipeline.

• One of those investments is backing Factory OS, which makes modular residential buildings. While it may seem a tad ironic for Meta to invest in building physical spaces, it's acutely aware of the ongoing housing shortage, especially since it’s headquartered in the Bay Area. (Meta is also financing a number of affordable housing projects in Silicon Valley, and even building its own “village” of residential and commercial buildings near its Menlo Park, Calif. headquarters.)
• A lot of Meta’s investments have also been outside of the U.S., with a focus in Asia. It's backed telecom giant Jio, Unacademy, and social commerce company Meesho in India, and Southeast Asian e-companies Tokopedia and GoJek (now merged as GoTo), to name a few.

A Meta spokesperson tells Axios: “Meta selectively invests in businesses that help to connect people together in innovative new ways as it looks to fuel growth or create new opportunities for business of all sizes.”

• Corporate VCs have ramped up their investments over the years, not wanting to miss out on the booming startup market.

• Scoop: Facebook establishing a venture arm to invest in startups (Axios)
• Building a billion-player game (Protocol)
• Facebook users drop, while metaverse runs up a tab (Axios)

Meta is no newbie to the corporate venture game.

• Question: What was the company's first foray into setting up a VC effort? (Answer at the bottom.)