It looks like Storm8 may be veering down the funding route instead of pursuing acquisition talks.

TechCrunch is reporting that the company may be raising $300 million at a $1 billion valuation from Accel Partners and Technology Crossover Ventures. Storm8 is a bootstrapped mobile gaming company that has six of the iPhone’s top 50 grossing titles and said it has amassed at least 5 million daily active users.

Two weeks ago, we wrote that the company, which makes top grossing games like Fashion Story and World War, had approached Electronic Arts about a sale and that Zynga was another prospective buyer at a rumored price of $500 million. A day after we published, we began hearing about various venture firms meeting with the company so we assumed that they were still considering funding.

A $1 billion valuation would be a roughly 20X multiple on what we’ve heard is a $40 to $50 million annual run rate for this year. That would be more than double the revenue multiple that PopCap Games saw when it agreed to sell to Electronic Arts in a deal worth up to $1.3 billion. (PopCap made more than $100 million in 2010, and Electronic Arts said the company saw 40 percent year-over-year revenue growth for the quarter ending in March.)

TechCrunch says that it has heard that Storm8′s run rate is $100 million. But the company has done at least three 40 percent-off sales on virtual currency in the past two months. That would boost its monthly run-rate, and potentially its valuation, in the eyes of prospective buyers and investors. But it also is not a sustainable practice, as it may undermine long-term sales.

Storm8 chief executive Perry Tam said, “We have a policy on not commenting on industry rumors.” Accel declined to comment, while we’ve heard from a source familiar with negotiations that Technology Crossover Ventures may not end up in the round. Accel also already has two irons in the fire with its investments in Rovio Mobile and Booyah. That said, venture firms have not shied away from having multiple bets in mobile gaming. Andreessen Horowitz has a few including TinyCo, Zynga and at least one other unrevealed mobile gaming startup.

We know that Storm8 has met with other venture firms in recent weeks, so there are a few other possible investors too.

Whatever the case — whether it’s $1 billion or not — Storm8 will get a respectable valuation considering the company’s humble, bootstrapped roots. Storm8 makes one-third of Android’s top 25 grossing games and usually has more top-grossing iOS titles than any other developer in the top 50.

If the company pursues the funding route instead of the acquisition one, we would be curious if part of the round will go toward cashing out founders and early employees. Rovio Mobile’s $42 million round from Atomico Ventures and Accel Partners was said to have been secondary, meaning it also involved taking money off the table.