SCVNGR, the Boston-based mobile gaming  and payment company and maker of the mobile payment app LevelUp, has raised $12 million from Highland Capital, Google Ventures, Balderton Capital and new investors Continental Investors and Transmedia Capital. This puts SCVNGR’s total money raised $32 million.

Call this the final step in the company’s transition from its initial focus on the social gaming platform SCVNGR to the mobile payment app LevelUp. SCVNGR launched LevelUp in March 2011, and though the SCVNGR app still exists within the company, its priority is LevelUp.

The company claims this is “part of a larger fundraising round,” according to a press release. We asked about that, and here’s what founder Seth Priebatsch replied:

“This is a new round of preferred stock that will be left open for 1-2 more large strategic partners to join. We’re already in late-stage conversations with them – just haven’t officially closed on their funds yet.”

So why announce the $12 million now? Perhaps to put a little bit of pressure on the strategics to get on board.

The company’s last round in January of 2011 was $15 million at a $100 million valuation.

I wrote about why LevelUp works for consumers a few weeks back, but I also did an interview with the company on its roadmap for growth, and it clarifies just what investors are betting on. As I wrote:

Not surprisingly, LevelUp is thinking hard about the Walmart’s and the Target’s of the world, and it believes that both will be developing their own brand specific mobile payment apps. Just as brands like Macy’s push their own credit cards, the big retailers want to get out from under credit card fees, as well as to collect valuable data about their customers.

For LevelUp, then, the challenge is to get big enough fast enough so that Walmart and Target can’t ignore them.

I’m clearly a bit more optimistic about LevelUp than some of my colleagues, but even I admit that this is massively ambitious. The app is available for use at 3,000 merchant partners in 8 cities, and the company is working to prove that it can scale by launching cities without boots on the ground in the form of a sales team.

Partnerships like the one the company just launched with Sovereign Bank – to incentivize customers linking their debit card with LevelUp – can help. Speed matters for all startups, but even more than usual LevelUp is in a race.