The firm said that the additional cash would be used to speed up the rollout of its global gaming network.
Terraplay plans to provide a ready-made network for games publishers wanting to offer online gaming on a number of formats to players around the world.
As well as providing support for global and local communities, the platform will also take care of in-game billing and includes business tools to operate and monitor the network gaming.
"Through this partnership we will be able to get access to the latest technology, and draw on the global presence of Cisco which will be very useful in building our global gaming network," said Terraplay chief executive Sven Hålling.
Terraplay is also developing gaming solutions for the upcoming IP Multimedia Subsystem (IPMS) standard for mobile network service layer architectures.
IPMS allows users to contact friends to chat, video call or play with just a click in the phone book, with one username for all services.
Terraplay has already demonstrated an IPMS gaming solution where users can play a multiplayer game and talk to opponents at the same time in a similar fashion to Xbox Live.
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