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Medal.tv, a video clipping service for gamers, enters the livestreaming market with Rawa.tv acquisition
Medal.tv, a short-form video clipping service and social network for gamers, is entering the livestreaming market with the acquisition of Rawa.tv, a Twitch rival based in Dubai, which had raised around $1 million to date. The seven-figure, all-cash deal will see two of Rawa’s founders, Raya Dadah and Phil Jammal, now joining Medal, and further integrations between the two platforms going forward.
The Middle East and North African region (MENA) is one of the fastest-growing markets in gaming and still one that’s mostly un-catered to, explained Medal.tv CEO Pim de Witte, as to his company’s interest in Rawa.
“Most companies that target that market don’t really understand the nuances and try to replicate existing Western or Far-Eastern models that are doomed to fail,” he said. “Absorbing a local team will increase Medal’s chances of success here. Overall, we believe that MENA is an underserved market without a clear leader in the livestreaming space, and Rawa brings to Medal the local market expertise that we need to capitalize on this opportunity,” de Witte added.
Medal.tv’s community had been asking for the ability to do livestreaming for some time, the exec also noted, but the technology would have been too expensive for the startup to build using off-the-shelf services at its scale, de Witte said.
“People increasingly connect around live and real-time experiences, and this is something our platform has lacked to date,” he noted.
But Rawa, as the first livestreaming platform dedicated to Arab gaming, had built out its own proprietary live and network streaming technology that’s now used in all its products. That technology is now coming to Medal.tv.
Image Credits: Medal.tv
The two companies were already connected before today, as Rawa users have been able to upload their gaming clips to Medal.tv, and some Rawa partners had joined Medal’s skilled player program. Going forward, Rawa will continue to operate as a separate platform, but it will become more tightly integrated with Medal, the company says. Currently, Rawa sees around 100,000 active users on its service.
The remaining Rawa team will continue to operate the livestreaming platform under co-founder Jammal’s leadership following the deal’s close, and the Rawa HQ will remain based in Dubai. However, Rawa’s employees have been working remotely since the start of the pandemic, and it’s unclear if that will change in the future, given the uncertainty of COVID-19’s spread.
Medal.tv detailed its further plans for Rawa on its site, where the company explained it doesn’t aim to build a “general-purpose” livestreaming platform where the majority of viewers don’t pay — a call-out that clearly seems aimed at Twitch. Instead, it says it will focus on matching content with viewers who would be interested in subscribing to the creators. This addresses one of the challenges that has faced larger platforms like Twitch in the past, where it’s been difficult for smaller streamers to get off the ground.
The company also said it will remain narrowly focused on serving the gaming community as opposed to venturing into non-gaming content, as others have done. Again, this differentiates itself from Twitch which, over the years, expanded into vlogs and even streaming old TV shows. And it’s much different from YouTube or Facebook Watch, where gaming is only a subcategory of a broader video network.
The acquisition follows Medal.tv’s $9 million Series A led by Horizons Ventures in 2019, after the startup had grown to 5 million registered users and “hundreds of thousands” of daily active users. Today, the company says over 200,000 people create content every day on Medal, and 3 million users are actively viewing that content every month.
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Twitch introduces Animated Emotes for their 10th anniversary
Twitch announced today that it will release major updates to its Emotes this month to celebrate its 10th anniversary. These new features will include Animated Emotes, Follower Emotes and a Library for Emotes.
Since the origin of the livestreaming platform for gamers, Emotes — Twitch’s version of emojis — have been a key component of Twitch culture. They’re micro memes, and images like Kappa, TriHard and PogChamp have come to carry meaning in the greater gaming world, even off the Twitch platform.
“Emotes are a language that transcends countries,” said Ivan Santana, senior director of Community Product at Twitch. “Anywhere you are in the world, they mean the same thing for us.”
The Amazon-owned platform regularly adds new global Emotes, which can be used on any streamer’s channel. Individual creators can make custom Emotes for their own community, which paying subscribers can use across the platform. But the ability to add animated gifs as Emotes is something that the community has been asking for since Santana can remember.
“I’ve been at Twitch for four years, and it’s something people have been asking for since before I joined,” Santana told TechCrunch. “It’s certainly been a very, very long time.”
Streamers who lack animation skills need not worry. While the more tech-savvy among us can upload custom gifs, Twitch will provide six templates for streamers to choose from, which can animate their existing Emotes. These animations include Shake, Rave, Roll, Spin, Slide In and Slide Out. Viewers who are sensitive to animations will be able to turn off the feature in their Chat Settings.
Image Credits: Twitch
Twitch is also beta testing Follower Emotes, which will be available to select Partners and Affiliates. This feature creates a fun, free incentive for viewers to hit the follow button on a channel they might be checking out for the first time. When viewers follow a channel, they’ll be notified when the creator is streaming, which can lead to an eventual subscription. Twitch takes 50% of streamers’ subscription money, creating a valuable revenue stream for the company.
In Q1 of 2021, Twitch viewership hit an all-time high, growing 16.5% since the previous quarter. Twitch viewers watched 6.34 billion hours of content in Q1, making up 72.3% of the market share. That’s double the total hours watched on Twitch in Q1 of 2020. Facebook Gaming and YouTube Gaming earned 12.1% and 15.6% of viewership in the sector, respectively.
“For a long time, creators have been asking for better ways to attract and welcome new viewers into their channel,” said Santana. “The idea is generally to create a lot of excitement around that community, and more feelings ultimately of community.”
Creators with beta access will be able to upload up to five Emotes for their followers, but unlike Subscriber Emotes, followers won’t be able to use these across other channels. There’s no guarantee that Follower Emotes will be here to stay — Santana says it’s a feature Twitch is “experimenting” with — but if all goes well, the feature will roll out more widely later in the year.
Finally, the Library function will make it easier for creators to swap Emotes in and out of subscription tiers without having to delete and reupload them each time. This builds upon an upgrade that launched in January, which centralized channel-specific icons into an Emotes tab on the Creator Dashboard. As usual, new Emotes have to be approved by Twitch before they’re put into use. The Library will roll out soon to all Partners and Affiliates, staggered over a few months to account for an expected increase in volume of new Emotes.
“As Twitch has scaled, we now have millions of communities across many different cultures across the world,” Santana said. “We can hand over more of the controls of our Emote language to our community, and let them sort of evolve in a way that we never could imagine that ultimately serves them in their unique ways.”
Twitch teased that there’s more in the works to celebrate the platform’s 10th anniversary, including an official 10-Year celebration.
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Substack acquires team from community consulting startup People & Company
New media poster child Substack announced today that they’ve added a small community-building consultancy team to its ranks, acquiring the Brooklyn-based startup People & Company.
The small firm has been working with clients to build up their community efforts, and its team will now be tasked with building up some of the newsletter company’s upstart efforts for writers in its network.
In a blog post, Substack co-founder Hamish McKenzie said that the company had previously used the People & Co. team to consult on their fellowship and mentorship programs and that members of the team would now be working on a variety of new efforts, from scaling programs to help writers with legal support and health insurance to community-guided projects like workshops and meetups to help crowdsource insights.
“These people are the best in the world at what they do, and now they’re not only working for Substack, but they’re also working for you,” McKenzie wrote.
Beyond Substack, previous partners with People & Company include Porsche AG, Nike and Surfrider.
Substack has been blazing ahead in recent months, adding new partners and raising cash as it aims to bring on more and more subscribers to its network. The firm shared back in late March that it had raised a $65 million round at a reported valuation around $650 million, according to earlier reporting by Axios.
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Lowkey raises $7 million from a16z to help game streamers capitalize on short-form video
While the growth of game-streaming audiences have continued on desktop platforms, the streaming space has felt surprisingly stagnant at times, particularly due to the missing mobile element and a lack of startup competitors.
Lowkey, a gaming startup that builds software for game streamers, is aiming to build out opportunities in bit-sized clips on mobile. The startup wants to be a hub for both creating and viewing short gaming clips but also sees a big opportunity in helping streamers cut down their existing content for distribution on platforms like Instagram and TikTok where short-form gaming content sees a good deal of engagement.
The startup announced today that they’ve closed a $7 million Series A led by Andreessen Horowitz with participation from a host of angel investors including Figma’s Dylan Field, Loom’s Joe Thomas and Plaid’s Zach Perret and William Hockey.
We last covered Lowkey in early 2020 when the company was looking to build out a games tournament platform for adults. At the time, the company had already pivoted after going through YC as Camelot, which allowed audiences on Twitch and YouTube to pay creators to take on challenges. This latest shift brings Lowkey back to the streaming world but more focused on becoming a tool for streamers and a mobile hub for viewers.
Twitch and YouTube Gaming have proven to be pretty uninterested in short-form content, favoring the opportunities of long-form streams that allow creators to press broadcast and upload lengthy streams. Lowkey users can easily upload footage captured from Lowkey’s desktop app or directly import a linked stream. This allows content creators to upload and comment on their own footage or remix and respond to another streamer’s content.
One of the challenges for streamers has been adapting widescreen content for a vertical video form factor, but CEO Jesse Zhang says that it’s not really a problem with most modern games. “Games inherently want to focus you attention on the center of the screen,” Zhang tells TechCrunch. “So, almost all clips extend really cleanly to like a mobile format, which is what we’ve done.”
Lowkey’s desktop app is available on Windows and their new mobile app is now live for iOS.
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Extra Crunch roundup: Edtech VC survey, 5 founder mistakes, fintech liquidity, more
Edtech is so widespread, we already need more consumer-friendly nomenclature to describe the products, services and tools it encompasses.
I know someone who reads stories to their grandchildren on two continents via Zoom each weekend. Is that “edtech?”
Similarly, many Netflix subscribers sought out online chess instructors after watching “The Queen’s Gambit,” but I doubt if they all ran searches for “remote learning” first.
Edtech needs to reach beyond underfunded public school systems to become more sustainable, which is why more investors and founders are focusing on lifelong learning.
Besides serving traditional students with field trips and art classes, a maturing sector is now branching out to offer software tutors, cooking classes and singing lessons.
For our latest investor survey, Natasha Mascarenhas polled 13 edtech VCs to learn more about how “employer-led up-skilling and a renewed interest in self-improvement” is expanding the sector’s TAM.
Here’s who she spoke to:
- Deborah Quazzo, managing partner, GSV Ventures
- Ashley Bittner, founding partner, Firework Ventures (a future of work fund with portfolio companies LearnIn and TransfrVR)
- Jomayra Herrera, principal, Cowboy Ventures (a generalist fund with portfolio companies Hone and Guild Education)
- John Danner, managing partner, Dunce Capital (an edtech and future of work fund with portfolio companies Lambda School and Outschool)
- Mercedes Bent and Bradley Twohig, partners, Lightspeed Venture Partners (a multistage generalist fund with investments including Forage, Clever and Outschool)
- Ian Chiu, managing director, Owl Ventures (a large edtech-focused fund backing highly valued companies including Byju’s, Newsela and Masterclass)
- Jan Lynn-Matern, founder and partner, Emerge Education (a leading edtech seed fund in Europe with portfolio companies like Aula, Unibuddy and BibliU)
- Benoit Wirz, partner, Brighteye Ventures (an active edtech-focused venture capital fund in Europe that backs YouSchool, Lightneer and Aula)
- Charles Birnbaum, partner, Bessemer Venture Partners (a generalist fund with portfolio companies including Guild Education and Brightwheel)
- Daniel Pianko, co-founder and managing director, University Ventures (a higher ed and future of work fund that is backing Imbellus and Admithub)
- Rebecca Kaden, managing partner, Union Square Ventures (a generalist fund with portfolio companies including TopHat, Quizlet, Duolingo)
- Andreata Muforo, partner, TLCom Capital (a generalist fund backing uLesson)
Full Extra Crunch articles are only available to members
Use discount code ECFriday to save 20% off a one- or two-year subscription
In other news: Extra Crunch Live, a series of interviews with leading investors and entrepreneurs, returns next month with a full slate of guests. This year, we’re adding a new feature: Our guests will analyze pitch decks submitted by members of the audience to identify their strengths and weaknesses.
If you’d like an expert eye on your deck, please sign up for Extra Crunch and join the conversation.
Thanks very much for reading! I hope you have a fantastic weekend — we’ve all earned it.
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
13 investors say lifelong learning is taking edtech mainstream
Image Credits: Bryce Durbin
Rising African venture investment powers fintech, clean tech bets in 2020
Image Credits: Nigel Sussman (opens in a new window)
After falling into yesterday’s wild news cycle, Alex Wilhelm returned to The Exchange this morning with a close look at venture capital activity across Africa in 2020.
“Comparing aggregate 2020 figures to 2019 results, it appears that last year was a somewhat robust year for African startups, albeit one with fewer large rounds,” he found.
For more context, he interviewed Dario Giuliani, the director of research firm Briter Bridges, which focuses on emerging markets in Africa, Asia and Latin America.
Talent and capital are shifting cybersecurity investors’ focus away from Silicon Valley
Image Credits: MCCAIG (opens in a new window) / Getty Images
New cybersecurity ecosystems are popping up in different parts of the world.
Some of of that growth has been fueled by an exodus from the Bay Area, but many early-stage security startups already have deep roots in East Coast cities like Boston and New York.
In the United Kingdom and Europe, government innovation programs have helped entrepreneurs close higher numbers of Series A and B rounds.
Investor interest and expertise is migrating out of Silicon Valley: This post will help you understand where it’s going.
Will Apple’s spectacular iPhone 12 sales figures boost the smartphone industry in 2021?
Image Credits: NurPhoto (opens in a new window) / Getty Images
Today’s smartphones are unfathomably feature-rich and durable, so it’s logical that sales have slowed.
A phone purchased 18 months ago is probably “good enough” for many consumers, especially in times of economic uncertainty.
Then again, of the record $111.4 billion in revenue Apple earned last quarter, $65.68 billion came from phone sales, largely driven by the release of the iPhone 12.
Even though “Apple’s success this quarter was kind of a perfect storm,” writes Hardware Editor Brian Heater, “it’s safe to project a rebound for the industry at large in 2021.”
The 5 biggest mistakes I made as a first-time startup founder
Image Credits: Randy Faris (opens in a new window) / Getty Images
Finmark co-founder and CEO Rami Essaid wrote a post for Extra Crunch that candidly describes the traps he laid for himself that made him a less-effective entrepreneur.
As someone who’s worked closely with founders at several startups, each of the points he raised resonated deeply with me.
In my experience, many founders have a hard time delegating, which can quickly create cultural and operational problems. Rami’s experience bears this out:
“I became a human GPS: People could follow my directions, but they struggled to find the way themselves. Independent thinking suffered.”
Dear Sophie: How can I sponsor my mom and stepdad for green cards?
Image Credits: Bryce Durbin/TechCrunch
Dear Sophie:
I just got my U.S. citizenship! My husband and I want to bring my mom and her husband to the U.S. to help us take care of our preschooler and toddler.
My biological dad passed away several years ago when I was an adult and my mom has since remarried.
— Appreciative in Aptos
Check out the amazing speakers joining us on Extra Crunch Live in February
Next month, Extra Crunch Live returns with a lineup of guests who are extremely well-qualified to discuss early-stage startups.
Each Wednesday at noon PPST/3 p.m. EST, join a conversation with founders and the investors who backed their companies:
February 3:
Gaurav Gupta (Lightspeed Venture Partners) + Raj Dutt (Grafana Labs)
February 10:
Aydin Senkut (Felicis Ventures) + Kevin Busque (Guideline)
February 17:
Steve Loughlin (Accel) + Jason Boehmig (Ironclad)
February 24:
Matt Harris (Bain Capital) + Isaac Oates (Justworks)
Also, we’re adding a new feature to Extra Crunch Live — our guests will offer advice and feedback on pitch decks submitted by Extra Crunch members in the audience!
10 VCs say interactivity, regulation and independent creators will reshape digital media in 2021
Image Credits: Aleksandar Nakic (opens in a new window) / Getty Images
Since the pandemic disrupted the social rhythms of work and school, many of us have compensated by changing our relationship to digital media.
For instance, I purchased a new sofa and thicker living room curtains several months ago when I realized we have no idea when movie theaters will reopen.
Last year, podcast sponsors spent almost $800 million to reach listeners, but ad revenue is estimated to surpass $1 billion this year. Clearly, I’m not the only person who used a discount code to buy a new product in 2020.
At this point, I can scarcely keep track of the multiple streaming platforms I’m subscribed to, but a new voice-activated remote control that comes with my basic cable plan makes it easier to browse my options.
Media reporter Anthony Ha spoke to10 VCs who invest in media startups to learn more about where they see digital media heading in the months ahead. For starters, how much longer can we expect traditional advertising models to persist?
And in a world with hundreds of channels, how are creators supposed to compete for our attention? What sort of discovery tools can we expect to help us navigate between a police procedural set in a Scandinavian village and a 90s sitcom reboot?
Here’s who Anthony interviewed:
- Daniel Gulati, founding partner, Forecast Fund
- Alex Gurevich, managing director, Javelin Venture Partners
- Matthew Hartman, partner, Betaworks Ventures
- Jerry Lu, senior associate, Maveron
- Jana Messerschmidt, partner, Lightspeed Venture Partners
- Michael Palank, general partner, MaC Venture Capital (with additional commentary from MaC’s Marlon Nichols)
- Pär-Jörgen Pärson, general partner, Northzone
- M.G. Siegler, general partner, GV
- Laurel Touby, managing director, Supernode Ventures
- Hans Tung, managing partner, GGV Capital
Normally, we list each investor’s responses separately, but for this survey, we grouped their responses by question. Some readers say they use our surveys to study up on an individual VC before pitching them, so let us know which format you prefer.
Does a $27 billion or $29 billion valuation make sense for Databricks?
Image Credits: Nigel Sussman (opens in a new window)
Data analytics platform Databricks is reportedly raising new capital that could value the company between $27 billion and $29 billion.
By the end of Q3 2020, Databricks had surpassed a $350 million run rate — a $150 million YoY increase, reports Alex Wilhelm.
At the time, he described the company as “an obvious IPO candidate” with “broad private-market options.”
Which begs the question: “Can we come up with a set of numbers that help make sense of Databricks at $27 billion?”
End-to-end operators are the next generation of consumer business
Image Credits: Natalia Timchenko (opens in a new window) / Getty Images
Rapid shifts in the way we buy goods and services disrupted old-school marketplaces like local newspapers and the Yellow Pages.
Today, I can use my phone to summon a plumber, a week’s worth of groceries or a ride to a doctor’s office.
End-to-end operators like Netflix, Peloton and Lemonade take a lot of time and energy to reach scale, but “the additional capital required is often outweighed by the value captured from owning the entire experience.”
Unpacking Chamath Palihapitiya’s SPAC deals for Latch and Sunlight Financial
Image Credits: Nigel Sussman (opens in a new window)
On January 25, Social Capital CEO Chamath Palihapitiya tweeted that he was making two blank-check deals.
Enterprise SaaS company Latch makes keyless entry systems; Sunlight Financial helps consumers finance residential solar power installations.
“There are nearly 300 SPACs in the market today looking for deals,” noted Alex Wilhelm, who unpacked both transactions.
“There’s no escaping SPACs for a bit, so if you are tired of watching blind pools rip private companies into the public markets, you are not going to have a very good next few months.”
Fintechs could see $100 billion of liquidity in 2021
Image Credits: dan tarradellas (opens in a new window) / Getty Images
On Monday, we published the Matrix Fintech Index, a three-part study that weighs liquidity, public markets and e-commerce trends to create a snapshot of an industry in perpetual flux.
For four years running, the S&P 500 and incumbent financial services companies have been outperformed by companies like Afterpay, Square and Bill.com.
In light of steady VC investment, increasing consumer adoption and a crowded IPO pipeline, “fintech represents one of the most exciting major innovation cycles of this decade.”
Drupal’s journey from dorm-room project to billion-dollar exit
Image Credits: Acquia
On January 15, 2001, then-college student Dries Buytaert released Drupal 1.0.0, an open-source content-management platform. At the time, about 7% of the world’s population was online.
After raising more than $180 million, Buytaert exited to Vista Equity Partners for $1 billion in 2019.
Enterprise reporter Ron Miller interviewed Buytaert to learn more about his 18-year journey.
“His story is compelling, but it also offers lessons for startup founders who also want to build something big,” says Ron.
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Amazon acquires podcast network Wondery
Amazon just announced that it’s acquiring Wondery, the network behind podcasts including “Dirty John” and “Dr. Death.”
Wondery will become part of Amazon Music, which added support for podcasts (including its own original shows) in September. At the same time, the announcement claims that “nothing will change for listeners” and that the network’s podcasts will continue to be available from “a variety of providers.”
Media companies and streaming audio platforms are all making big bets on podcasting, with Spotify making a series of acquisitions including podcast network Gimlet, SiriusXM acquiring Stitcher and The New York Times acquiring Serial Productions. Amazon is coming relatively late to this market, but it will now have the support of a popular podcast maker as it works to catch up.
“With Amazon Music, Wondery will be able to provide even more high-quality, innovative content and continue their mission of bringing a world of entertainment and knowledge to their audiences, wherever they listen,” Amazon wrote.
Financial terms were not disclosed. The Wall Street Journal previously reported that acquisition talks were in the works, and that those talks valued Wondery at around $300 million.
The startup was founded in 2016 by former Fox executive Hernan Lopez (who’s currently fighting federal corruption charges tied to his time at Fox). Numbers from Podtrac rank it as the fourth largest podcast publisher in November, with an audience in the U.S. of more than 9 million unique listeners.
Wondery has raised a total of $15 million in funding from Advancit Capital, BDMI, Greycroft, Lerer Hippeau and others, according to Crunchbase.
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7 investors discuss augmented reality and VR startup opportunities in 2020
For all of the investors preaching that augmented reality technology will likely be the successor to the modern smartphone, today, most venture capitalists are still quite wary to back AR plays.
The reasons are plentiful, but all tend to circle around the idea that it’s too early for software and too expensive to try to take on Apple or Facebook on the hardware front.
Meanwhile, few spaces were frothier in 2016 than virtual reality, but most VCs who gambled on VR following Facebook’s Oculus acquisition failed to strike it rich. In 2020, VR did not get the shelter-in-place usage bump many had hoped for largely due to supply chain issues at Facebook, but VCs hope their new cheaper device will spell good things for the startup ecosystem.
To get a better sense of how VCs are looking at augmented reality and virtual reality in 2020, I reached out to a handful of investors who are keeping a close watch on the industry:
- Niko Bonatsos, General Catalyst
- Tipatat Chennavasin, The Venture Reality Fund
- Brianne Kimmel, Work Life Ventures
- Jacob Mullins, Shasta Ventures
- Gigi Levy-Weiss, NFX
- Brayton Williams, Boost VC
- Greg Castle, Anorak Ventures
Some investors who are bullish on AR have opted to focus on virtual reality for now, believing that there’s a good amount of crossover between AR and VR software, and that they can make safer bets on VR startups today that will be able to take advantage of AR hardware when it’s introduced.
“Besides Pokémon Go I don’t think we have seen the engagement numbers needed for AR,” Boost VC investor Brayton Williams tells TechCrunch. “We believe VR is still the largest long-term opportunity of the two. AR complements the real world, VR creates endless new worlds.”
Most of the investors I got in contact with were still fairly active in the AR/VR world, but many still disagreed whether the time was right for VR startups. For Jacob Mullins of Shasta Ventures, “It’s still early, but it’s no longer too early.” While Gigi Levy-Weiss of NFX says that the market is “sadly not happening yet,” Facebook’s Quest headsets have shown promise.
On the hardware side, the ghost of Magic Leap’s formerly hyped glory still looms large. Few investors are interested in making a hardware play in the AR/VR world, noting that startups don’t have the resources to compete with Facebook or Microsoft on a large-scale rollout. “Hardware is so capital intensive and this entire industry is dependent on the big players continuing to invest in hardware innovation,” General Catalyst’s Niko Bonatsos tells us.
Even those that are still bullish on startups making hardware plays for more niche audiences acknowledge that life had gotten harder for ambitious founders in these spaces, “the spectacular flare-outs do make it harder for companies to raise large amounts with long product release horizons,” investor Tipatat Chennavasin notes.
Responses have been edited for length and clarity.
Niko Bonatsos, General Catalyst
What are your general impressions on the health of the AR/VR market today?
We’re seeing some progress in VR and some of that is happening because of the Oculus ecosystem. They continue to improve the hardware and have a growing catalog of content. I think their onboarding and consumption experience is very consumer-friendly and that’s going to continue to help with adoption. On the consumer side, we’re seeing some companies across gaming, fitness and productivity that are earning and retaining their audiences at a respectable rate. That wasn’t happening even a year ago so it may be partially a COVID lift but habits are forming.
The VR bets of several years ago have largely struggled to pan out, if you were to make a startup investment in this space today what would you need to see?
Companies to watch are the ones that are creating cool experiences with mobile as the first entry point. Wave VR, Rec Room, VRChat are making it really easy for consumers to get a taste of VR with devices they already own. They’re not treating VR as just another gaming peripheral but as a way to create very cool, often celebrity-driven, content. These are the kinds of innovations that makes me optimistic about the VR category in general.
Most investors I chat with seem to be long-term bullish on AR, but are reticent to invest in an explicitly AR-focused startup today. What do you want to see before you make a play here?
In both AR/VR, a founder needs to be both super ambitious but patient. They’ll need to be flexible in thinking and open to pivoting a few times along the way. Product-market fit is always important but I want to see that they have a plan for customer retention. Fun to try is great, habit-forming is much better. Gaming continues to do pretty well as a category for VC dollars but it’d be interesting to see more founders look at making IRL sports experiences more immersive or figuring out how to enhance remote meeting experiences with VR to fix Zoom fatigue.
There have been a few spectacular flare-outs when it comes to AR/VR hardware investments, is there still a startup opportunity in AR/VR hardware?
Hardware is so capital intensive and this entire industry is dependent on the big players continuing to invest in hardware innovation. Facebook and Microsoft seem to be the main companies willing to spend here while others have backed away. If we expand our thinking for a minute, maybe the first real mainstream breakthrough AR/VR consumer experience isn’t visual. For VR, it might be the mobile experiences. For AR maybe AirPods or AirPod-like devices are the right entry point for consumers. They’re in millions of people’s ears already and who doesn’t want their own special-agent-like earpiece? That’s where founders might find some opportunity.
Tipatat Chennavasin, The Venture Reality Fund
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Tokyo-based virtual reality game developer Thirdverse gets $8.5 million Series A
Thirdverse, the virtual reality game developer behind “Swords of Gargantua,” has raised $8.5 million in Series A funding. The round was led by JAFCO, with participation from Presence Capital, Sisu Ventures and Incubate Fund, and will be used for hiring, co-founder Masaru Ohnogi told TechCrunch.
Based in Tokyo, Thirdverse was started four years ago as Yomuneco, but relaunched as Thirdverse in June to align with its corporate mission of creating a “Third Place inside the Metaverse,” where “each person has choices in his or her own hands and can live whatever life he or she wants to.” The company is currently focused on multiplayer virtual reality games, but its ultimate goal is to combine virtual reality with blockchain technology to create “VR worlds” where people can create online communities.
The concept has taken on a new relevancy, as COVID-19-related stay-at-home orders prompted organizations to bring online gatherings, including conferences, concerts and even their offices.
Users have also spent more time playing online games during the pandemic, with titles that have a social element, like “Animal Crossing: New Horizons,” proving especially popular.
“Our sales and active users started increasing in late March as people started spending more time at home,” said Ohnogi. “And this increased engagement has remained consistent, even as some communities have lifted stay-at-home orders.”
Most of Thirdverse’s current users are located in America, and Ohnogi said many of them use Oculus Quest headsets. During Facebook’s href=”https://techcrunch.com/2020/09/16/facebook-is-officially-killing-off-the-oculus-rift-line/”> virtual reality conference last month (which itself was held virtually), the tech giant announced it would release its new Oculus Quest 2 in Japan this month. Ohnogi said this is a big opportunity for Thirdverse because many Japanese people will see the new headsets in retail stores. “As one of the earliest leading VR companies in Japan, we’ve already seen a huge number of traction. We are really excited about it.”
Thirdverse is currently preparing to release other virtual reality games, including “Frostpoint VR: Proving Grounds,” a multi-player shooter game that will be available later this year for Oculus Rift, HTC Vive VR and Valve Index headsets.
In a statement, Sisu Ventures and Presence Capital founding partner Paul Bragiel said, “In the rapidly growing VR gaming landscape, Thirdverse stands out as having strong leadership, deep relationships and a big vision to become the category leader in this market.”
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The Oculus Quest is getting its own Fortnite ripoff
Fortnite may not be available in VR (or on iOS), but Oculus Quest users will soon be getting their own Fortnite clone for virtual reality.
Nearly two years after its funding and initial launch announcement, BigBox VR is finally ready to roll out its battle royale game, “POPULATION: ONE” to players on the Quest (and the sunsetting Rift hardware).
Co-founders Chia Chin Lee and Gabe Brown started their game development for virtual reality with a shooter called Smashbox Arena, but “POPULATION: ONE” is the big gambit for the game studio.
The COVID-19 pandemic has managed to boost the sales of the Quest, turning it into more of a genuine consumer device instead of just something for the technorati and digital power users. If this new audience for virtual reality can take to the battle royale game in the same way that they’ve taken to Epic Games’ Fortnite title, it could go a long way toward giving Facebook’s platform a wedge to gain market share in what’s become the newest social network.
A lot has been written about how Fortnite has become the social forum for Gen Z and the cohort that’s coming up after them. As these users gravitate to TikTok and Fortnite, Facebook is becoming an afterthought for a new consumer demographic that the social network needs.
And as we wrote earlier, BigBox VR’s title shares more than a passing similarity to Fortnite.
To say the game shares some similarities with Fortnite is an understatement. Not only is it a battle royale title with a shrinking environment, but certain mechanics like gliding in at the beginning to scrounge for weapons and even Fortnite’s building feature are central to the gameplay. That being said, battle royale titles have exploded in the wake of PUBG and they seem to all share a lot among each other. For BigBox, VR is the distinguishing feature, with motion controls and the general feeling that everything is life-sized and in your control.
If the game can replicate Fortnite’s popularity in virtual reality, that could be a coup for Facebook and BigBox VR in a space where the social networking giant has traditionally been pwned.
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PopSugar co-founder says pandemic will create ‘a huge windfall’ for digital media
It’s been less than a year since Group Nine Media acquired PopSugar — but it’s been a uniquely challenging time in digital media.
Brian Sugar founded the eponymous women’s lifestyle site with his wife Lisa Sugar . Post-acquisition, he’s become president for the entirety of Group Nine (which also owns Thrillist, NowThis, The Dodo and Seeker) and also joined the company’s board.
That job probably looks very different from what he expected last fall. The company had to lay off 7% of its staff back in April, which Sugar described as “one of the worst days of my career.” At the same time, he remains confident about the online advertising business. In his view, it’s TV advertising that’s taken a “huge punch” in the face and will never recover.
“We like to think of ourselves as one of the fastest, most innovative publishers out there,” Sugar told me. “And now’s the time for us to kind of show that off.”
You can read an edited, updated and condensed transcript of our conversation below, in which I talked to Sugar about how his role has evolved, how he motivates the team during difficult times and what gets lost in the shift to remote work.
TechCrunch: Obviously, it’s been a crazy couple of months since we last talked. What does your job look like now?
Brian Sugar: Well, I feel like a data miner, searching for answers. I feel like a hackathon engineer. And I feel like a therapist. You know, we like to think of ourselves as one of the fastest, most innovative publishers out there. And now’s the time for us to kind of show that off.
[We’ve just been] looking at data on how people are consuming our content across platforms. And on our site, we’ve come up with some really interesting ideas that we’ve implemented. We’ve been having these really cool hackathon Fridays to build stuff quickly, because a lot of people feel like they have a little bit more time on their hands — because you don’t have to travel to meetings, you can get more work done. Some people feel they’re more efficient.
We’re extremely optimistic. All our brands are extremely optimistic, and so is [the whole] company.
You mentioned launching some new products to respond to how audience behavior is changing. Are there any examples?
The first one [is] the PopSugar Fitness thing. We were planning on launching a paid workout subscription service in May, but everybody was working from home [in March], and we decided to pull the launch all the way up to as fast as we can launch it. We launched it that following weekend. Since the launch in late March, over the past few months, we’ve had 200,000 people sign up, and we have 50,000 monthly active users on it.
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