Sweden
Auto Added by WPeMatico
What we can learn from edtech startups’ expansion efforts in Europe
It’s a story common to all sectors today: investors only want to see ‘uppy-righty’ charts in a pitch. However, edtech growth in the past 18 months has ramped up to such an extent that companies need to be presenting 3x+ growth in annual recurring revenue to even get noticed by their favored funds.
Some companies are able to blast this out of the park — like GoStudent, Ornikar and YouSchool — but others, arguably less suited to the conditions presented by the pandemic, have found it more difficult to present this kind of growth.
One of the most common themes Brighteye sees in young companies is an emphasis on international expansion for growth. To get some additional insight into this trend, we surveyed edtech firms on their expansion plans, priorities and pitfalls. We received 57 responses and supplemented it with interviews of leading companies and investors. Europe is home 49 of the surveyed companies, six are based in the U.S., and three in Asia.
Going international later in the journey or when more funding is available, possibly due to a VC round, seems to make facets of expansion more feasible. Higher budgets also enable entry to several markets nearly simultaneously.
The survey revealed a roughly even split of target customers across companies, institutions and consumers, as well as a good spread of home markets. The largest contingents were from the U.K. and France, with 13 and nine respondents respectively, followed by the U.S. with seven, Norway with five, and Spain, Finland, and Switzerland with four each. About 40% of these firms were yet to foray beyond their home country and the rest had gone international.
International expansion is an interesting and nuanced part of the growth path of an edtech firm. Unlike their neighbors in fintech, it’s assumed that edtech companies need to expand to a number of big markets in order to reach a scale that makes them attractive to VCs. This is less true than it was in early 2020, as digital education and work is now so commonplace that it’s possible to build a billion-dollar edtech in a single, larger European market.
But naturally, nearly every ambitious edtech founder realizes they need to expand overseas to grow at a pace that is attractive to investors. They have good reason to believe that, too: The complexities of selling to schools and universities, for example, are widely documented, so it might seem logical to take your chances and build market share internationally. It follows that some view expansion as a way of diversifying risk — e.g. we are growing nicely in market X, but what if the opportunity in Y is larger and our business begins to decline for some reason in market X?
International expansion sounds good, but what does it mean? We asked a number of organizations this question as part of the survey analysis. The responses were quite broad, and their breadth to an extent reflected their target customer groups and how those customers are reached. If the product is web-based and accessible anywhere, then it’s relatively easy for a company with a good product to reach customers in a large number of markets (50+). The firm can then build teams and wider infrastructure around that traction.
Powered by WPeMatico
Exeger takes $38M to ramp up production of its flexible solar cells for self-powered gadgets
Sweden’s Exeger, which for over a decade has been developing flexible solar cell technology (called Powerfoyle) that it touts as efficient enough to power gadgets solely with light, has taken in another tranche of funding to expand its manufacturing capabilities by opening a second factory in the country.
The $38 million raise is comprised of $20M in debt financing from Swedbank and Swedish Export Credit Corporation (SEK), with a loan amounting to $12M from Swedbank (partly underwritten by the Swedish Export Credit Agency (EKN) under the guarantee of investment credits for companies with innovations) and SEK issuing a loan amounting to $8M (partly underwritten by the pan-EU European Investment Fund (EIF)); along with $18M through a directed share issue to Ilija Batljan Invest AB.
The share issue of 937,500 shares has a transaction share price of $19.2 — which corresponds to a pre-money valuation of $860M for the solar cell maker.
Back in 2019 SoftBank also put $20M into Exeger, in two investments of $10M — entering a strategic partnership to accelerate the global rollout of its tech and further extending its various investments in solar energy.
The Swedish company has also previously received a loan from the Swedish Energy Agency, in 2014, to develop its solar cell tech. But this latest debt financing round is its first on commercial terms (albeit partly underwritten by EKN and EIF).
Exeger says its solar cell tech is the only one that can be printed in free-form and different colors, meaning it can “seamlessly enhance any product with endless power”, as its PR puts it.
So far two devices have integrated the Powerfoyle tech: A bike helmet with an integrated safety taillight (by POC), and a pair of wireless headphones (by Urbanista). Although neither has yet been commercially launched — but both are slated to go on sale next month.
Exeger says its planned second factory in Stockholm will allow it to increase its manufacturing capacity tenfold by 2023, helping it target a broader array of markets sooner and accelerating its goal of mass adoption of its tech.
Its main target markets for the novel solar cell technology currently include consumer electronics, smart home, smart workplace, and IoT.
More device partnerships are slated as coming this year.
Exeger’s Powerfoyle solar cell tell integrated into a pair of Urbanista headphones (Image Credits: Exeger/Urbanista)
“We don’t label our rounds but take a more pragmatic view on fundraising,” said Giovanni Fili, founder and CEO. “Developing a new technology, a new energy source, as well as laying the foundation for a new industry takes time. Thus, a company like ours requires long-term strategic investors that all buy into the vision as well as the overall strategy. We have spent a lot of time and energy on this, and it has paid off. It has given the company the resources required, both time and money, to bring an invention to a commercial launch, which is where we are today.”
Fili added that it’s chosen to raise debt financing now “because we can”.
“The same answer as when asked why we build a new factory in Stockholm, Sweden, rather than abroad. We have always said that once commercial, we will start leveraging the balance sheet when securing funds for the next factory. Thanks to our long-standing relationship with Swedbank and SEK, as well as the great support of the Swedish government through EKN underwriting part of the loans, we were able to move this forward,” he said.
Discussing the forthcoming two debut gizmos, the POC Omne Eternal helmet and the Urbanista Los Angeles headphones — which will both go sale in June — Fili says interest in the self-powered products has “surpassed all our expectations”.
“Any product which integrates Powerfoyle is able to charge under all forms of light, whether from indoor lamps or natural outdoor light. The stronger the light, the faster it charges. The POC helmet, for example, doesn’t have a USB port to power the safety light because the ambient light will keep it charging, cycling or not,” he tells TechCrunch.
“The Urbanista Los Angeles wireless headphones have already garnered tremendous interest online. Users can spend one hour outdoors with the headphones and gain three hours of battery time. This means most users will never need to worry about charging. As long as you have our product in light, any light, it will constantly charge. That’s one of the key aspects of our technology, we have designed and engineered the solar cell to work wherever people need it to work.”
“This is the year of our commercial breakthrough,” he added in a statement. “The phenomenal response from the product releases with POC and Urbanista are clear indicators this is the perfect time to introduce self-powered products to
the world. We need mass scale production to realize our vision which is to touch the lives of a billion people by 2030, and that’s why the factory is being built now.”
Powered by WPeMatico
Swedish battery manufacturer Northvolt receives a $14 billion order from VW
Northvolt, the Swedish battery manufacturer which raised $1 billion in financing from investors led by Goldman Sachs and Volkswagen back in 2019, has signed a massive $14 billion battery order with VW for the next 10 years.
The big buy clears up some questions about where Volkswagen will be getting the batteries for its huge push into electric vehicles, which will see the automaker reach production capacity of 1.5 million electric vehicles by 2025.
The deal will not only see Northvolt become the strategic lead supplier for battery cells for Volkswagen Group in Europe, but will also involve the German automaker increasing its equity ownership of Northvolt.
As part of the partnership agreement, Northvolt’s gigafactory in Sweden will be expanded and Northvolt agreed to sell its joint venture share in its Salzgitter, Germany factory to Volkswagen as the car maker looks to build up its battery manufacturing efforts across Europe, the companies said.
The agreement between Northvolt and VW brings the Swedish battery maker’s total contracts to $27 billion in the two years since it raised its big $1 billion cash haul.
“Volkswagen is a key investor, customer and partner on the journey ahead and we will continue to work hard with the goal of providing them with the greenest battery on the planet as they rapidly expand their fleet of electric vehicles,” said Peter Carlsson, the co-founder and chief executive of Northvolt, in a statement.
Northvolt’s other partners and customers include ABB, BMW Group, Scania, Siemens, Vattenfall and Vestas. Together these firms comprise some of the largest manufacturers in Europe.
Back in 2019, the company said that its cell manufacturing capacity could hit 16 gigawatt hours and that it had sold its capacity to the tune of $13 billion through 2030. That means that the Volkswagen deal will eat up a significant portion of expanded product lines.
Founded by Carlsson, a former executive at Tesla, Northvolt’s battery business was intended to leapfrog the European Union into direct competition with Asia’s largest battery manufacturers — Samsung, LG Chem and CATL.
Back when the company first announced its $1 billion investment round, Carlsson had said that Northvolt would need to build up to150 gigawatt hours of capacity to hit targets for 2030 electric vehicle sales.
The plant in Sweden is expected to hit at least 32 gigawatt hours of production, thanks in part to backing by the Swedish pension fund firms AMF and Folksam and Ikea-linked IMAS Foundation, in addition to the big financial partners Volkswagen and Goldman Sachs.
Northvolt has had a busy few months. Earlier in March the company announced the acquisition of the Silicon Valley-based startup company Cuberg.
That acquisition gave Northvolt a foothold in the U.S. and established the company’s advanced technology center.
The acquisition also gives Northvolt a window into the newest battery chemistry that’s being touted as a savior for the industry — lithium metal batteries.
Cuberg spun out of Stanford University back in 2015 to commercialize what the company called its next-generation battery, combining a liquid electrolyte with a lithium metal anode. The company’s customers include Boeing, BETA Technologies, Ampaire and VoltAero, and it was backed by Boeing HorizonX Ventures, Activate.org, the California Energy Commission, the Department of Energy and the TomKat Center at Stanford.
Cuberg’s cells deliver 70% increased range and capacity versus comparable lithium ion cells designed for electric aviation applications. The two companies hope they can apply the technology to Northvolt’s automotive and industrial product portfolio with the ambition to industrialize cells in 2025 that exceed 1,000 Wh/L, while meeting the full spectrum of automotive customer requirements, according to a statement.
“The Cuberg team has shown exceptional ability to develop world-class technology, proven results and an outstanding customer base in a lean and efficient organization,” said Peter Carlsson, CEO and co-founder, Northvolt in a statement. “Combining these strengths with the capabilities and technology of Northvolt allows us to make significant improvements in both performance and safety while driving down cost even further for next-generation battery cells. This is critical for accelerating the shift to fully electric vehicles and responding to the needs of the leading automotive companies within a relevant time frame.”
Early Stage is the premier “how-to” event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company building: Fundraising, recruiting, sales, product-market fit, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included for audience questions and discussion. Use code “TCARTICLE at checkout to get 20% off tickets right here.
Powered by WPeMatico
How Roblox’s creator accelerator helps the gaming giant build new platform opportunities
As Roblox eyes what could be a historic debut on public markets in the coming months, investors who have valued the company at $29.5 billion are certainly eyeing the gaming company’s dedicated and youthful user base — but it’s the 7 million active creators and developers on the Roblox platform that they are likely most impressed by.
Since 2015, Roblox has been running an accelerator program focused on enabling the next generation of game developers to be successful on its platform. Over the years, the program has expanded from one annual class to now three, each with around 40 developers participating. That means more than 100 developers per year are working directly with Roblox to gain mentorship, education and funding opportunities to get their games off the ground.
As the company’s efforts on this front have grown more formalized, Roblox in 2018 hired former Accelerator alumni Christian Hunter, a Roblox gamer since age 10 and game developer since 13, to run the program full time. Having been through the experience himself, Hunter brought to the program an understanding of how the Accelerator could improve, based on a developer’s own perspective.
However, the COVID-19 pandemic threw into disarray the company’s plans to run the program. Instead of being able to invite developers to spend three months participating in classes hosted at Roblox’s San Mateo office, the company had to revamp the program for remote participation.
As it turned out, developers who were used to playing and building games taking place in virtual worlds quickly adjusted to the new online experience.
“Before COVID, everyone was together. It was easier to talk to people. [Developers] could just walk up to someone that was on our product or engineering team if they were running into issues,” explains Roblox Senior Product Manager Rebecca Crose. “But obviously, with COVID-19, we had to switch and think differently.”
The remote program, though differently structured, offered several benefits. Developers could join the program’s Discord server to talk to both current participants and previous classes, and reach out and ask questions. They could also participate in the Roblox company Slack to ask the team questions, and there were more playtests being scheduled to gain reactions and feedback from Roblox employees.
Meanwhile, to get to know one another when they couldn’t meet in person, developers would have game nights where they’d play each other’s games or others that were popular on Roblox, and bond within the virtual environment instead of in face-to-face meetings and classes.
The actual Accelerator content, however, remained fairly consistent during the remote experience. Participants had weekly standups, talks on topics like game design and production, and weekly feedback sessions where they asked Roblox engineers questions.
But by its nature, a remote Accelerator broadened who could attend. Instead of limiting the program to only those who could travel to San Mateo and stay for three months, the program was opened up to a more global and diverse audience. This drove increased demand, too.
The 2020 program saw Roblox receiving the largest number of applications ever — five times the usual number.
As a result, the class included participants from five countries: The Philippines, South Korea, Sweden, Canada and the U.S.
The developers at IndieBox Studios saw the program as a chance to double down on their game development side hustles. The young friends spread across the U.K. and Kentucky spent their time during the accelerator scaling up their photorealistic title called Tank Warfare.
“We’ve actually never once met in real life, like, we’ve been friends for going on, what, nine years now,” Michael Southern tells TechCrunch. “We met on Roblox.”
IndieBox is representative of many of Roblox’s early developer teams — younger gamers that have spent more than a decade learning the ins and outs of the evolving Roblox gaming platform.
“We all joined Roblox way back in 2008,” IndieBox’s Frank Garrison says. “But we only started developing on the platform in 2019. And for us, the decision to choose Roblox was more down to like, well it’s what we know, why not give it a bash?”
The demographics of the accelerator have been shifting in other ways as the developer base grows more diverse.
“I would say, in the beginning, it was mostly young males. But as we’ve watched the program evolve, we’ve been getting so many new interesting teams,” notes Program Manager Christian Hunter.
The 2020 program had more women participants than ever, for example, with 12 in a class of 50. And one team was all women.
The age of participants, who are typically in the 18 to 22-year-old range, also evolved.
“We’ve seen a lot more older folks,” Hunter says. “With [the COVID-19 pandemic], we actually saw our first 50-year-old in the program. We’ve never had anyone older than, I’d say, 24. And in 2020, we had 12 individuals over the age of 30,” he notes.
Two of the teams were also a combination of a kid and a parent.
Shannon Clemens learned about the Roblox platform from her son Nathan, learning to code and bringing her husband Jeff in to form a studio called Simple Games. Nathan’s two sisters help the studio part time, as well as his friend Adrian Holgate.
“Seeing [my son’s] experience on Roblox getting involved with the platform, I thought it would be neat to learn how to make our own games,” Shannon Clemens told TechCrunch.
Their title Gods of Glory has received more than 13.5 million visits from Roblox players since launching in September.
“Our whole family is kind of creatively bent towards having fun with games and coming up with things like that,” Jeff Clemens tells us. “Why would we not try this? So, that’s when we applied to the program and said, ‘well, we’ll try and see if we get accepted,’ and we did and it’s been awesome.”
In addition to the changes facilitated by a remote environment, Roblox notes there were other perks enabled by remote learning. For one thing, the developers didn’t have to wake up so early to benefit from the experience.
“With it being remote, the developers were working their hours,” says Crose. “As a developer, we tend to work later and stay up at night. Having them come in at 9 AM sharp was very difficult. It was hard for them because they’re just like…a zombie. So we definitely saw that by letting them work their own hours, [there is] less burnout and they increase their productivity,” she says.
Though the COVID-19 crisis may eventually end as the world gets vaccinated, the learnings from the Accelerator and the remote advantages it offers will continue. Developers from the program hope that the growth seen on gaming platforms like Roblox continues as well.
“The pandemic has been great for most game studios,” developer Gustav Linde tells TechCrunch. “Obviously, it’s a very weird time, but the timing was good for us.”
The Gang Stockholm, a Swedish game development studio co-founded by Linde, has been building experiences — largely branded ones for clients, exclusively on the Roblox platform. The team of 12 has used the accelerator to slow down development deadlines and dig into some unique areas of the platform as well as focus wholly on their upcoming title, Bloxymon, which they plan to release this year.
“If you look at Steam and the App Store and Google Play, those markets are extremely crowded, and Roblox is a very exciting platform for developers right now,” said Linde. “Roblox is also getting a lot of attention and a lot of big brands are interested in entering the platform.”
Roblox says that going forward, future Accelerator programs will feature a remote element inspired by the COVID experience. The company plans to continue to make its program globally available, with the limitation for now, of English-speaking participants. But it’s looking to expand to reach non-English speakers with future programs.
The fall 2020 Accelerator class graduated in December 2020, and the next spring class will start in February 2021. Roblox says they are already in the process of recruiting for their summer 2021 class, which will again have some 40 participants. Roblox will again aim to continue diversifying the group of creators.
Powered by WPeMatico
Atlassian acquires asset management company Mindville
Atlassian today announced that it has acquired Mindville, a Jira-centric enterprise asset management firm based in Sweden. Mindville’s more than 1,700 customers include the likes of NASA, Spotify and Samsung.
Image Credits: Atlassian
With this acquisition, Atlassian is getting into a new market, too, by adding asset management tools to its lineup of services. The company’s flagship product is Mindville Insights, which helps IT, HR, sales, legal and facilities to track assets across a company. It’s completely agnostic as to which assets you are tracking, though, given Atlassian’s user base, most companies will likely use it to track IT assets like servers and laptops. But in addition to physical assets, you also can use the service to automatically import cloud-based servers from AWS, Azure and GCP, for example, and the team has built connectors to services like Service Now and Snow Software, too.
Image Credits: Mindville
“Mindville Insight provides enterprises with full visibility into their assets and services, critical to delivering great customer and employee service experiences. These capabilities are a cornerstone of IT Service Management (ITSM), a market where Atlassian continues to see strong momentum and growth,” Atlassian’s head of tech teams Noah Wasmer writes in today’s announcement.
Co-founded by Tommy Nordahl and Mathias Edblom, Mindville never raised any institutional funding, according to Crunchbase. The two companies also didn’t disclose the acquisition price.
Like some of Atlassian’s other recent acquisitions, including Code Barrel, the company was already an Atlassian partner and successfully selling its service in the Atlassian Marketplace.
“This acquisition builds on Atlassian’s investment in [IT Service Management], including recent acquisitions like Opsgenie for incident management, Automation for Jira for code-free automation, and Halp for conversational ticketing,” Atlassian’s Wasmer writes.
The Mindville team says it will continue to support existing customers and that Atlassian will continue to build on Insight’s tools while it works to integrate them with Jira Service Desk. That integration, Atlassian argues, will give its users more visibility into their assets and allow them to deliver better customer and employee service experiences.
Image Credits: Mindville
“We’ve watched the Insight product line be used heavily in many industries and for various disciplines, including some we never expected! One of the most popular areas is IT Service Management where Insight plays an important role connecting all relevant asset data to incidents, changes, problems, and requests,” write Mindville’s founders in today’s announcement. “Combining our solutions with the products from Atlassian enables tighter integration for more sophisticated service management, empowered by the underlying asset data.”
Powered by WPeMatico
European VC firm Pale Blue Dot plans to fund 40 ‘planet-positive’ startups
Pale Blue Dot, a newly outed European venture capital firm focused on climate tech, announced this week the first closing of its debut fund at €53 million.
Targeting pre-seed and seed stage startups, the firm says it will consider software and technology investments with a strong positive climate impact. Current areas of focus include food/agriculture, industry, fashion/apparel, energy and transportation, with plans to back up to 40 companies out of fund one.
Founding partners Hampus Jakobsson, Heidi Lindvall and Joel Larsson are stalwarts of the Nordic tech ecosystem and beyond: Jakobsson co-founded TAT (The Astonishing Tribe), which was sold to Blackberry in 2012, and is a prominent angel investor in Europe, most recently a venture partner at BlueYard Capital . Lindvall is the former head of accelerator and investment team at Fast Track Malmö, with a background in human rights and media. Larsson was previously managing director at Fast Track Malmö, with a technical background and prior fund management experience.
I put questions to all three, delving deeper into Pale Blue Dot’s remit and the firm’s investment thesis. We also discussed the macro trends that warrant a fund specializing in climate tech and why Europe is poised to become a leader in the space.
Pale Blue Dot is a new VC fund specializing in climate tech, but in a sense — and to varying degrees — isn’t every venture capital fund a climate tech fund these days?
Heidi Lindvall: We think all funds should be “planet-positive” and working for a better world, but it will take time until it is a focus. Still, most funds look at a potential positive impact late in their assessment and will not decline the deal if the startups wouldn’t be significantly pulling the world in a good direction.
Hampus Jakobsson: Focus has both upsides and downsides.
The negative part with being niche is that we won’t do investments in amazing people or startups that we don’t think are “climate-contributing enough” or that the founders aren’t doing it in a genuine way (as the risk of them to paying attention to the impact might lead them to become a noncontributing company).
Powered by WPeMatico
In conversation with Icebreaker, Finland’s most active pre-seed VC
Icebreaker claims to be Finland’s most active pre-seed VC. The firm, which also invests in Estonia and Sweden, has backed 38 companies in the last three years out of its first fund, with a 65% success rate so far for companies that have been able to raise follow-on funding.
Two weeks ago, Icebreaker announced the launch of Fund II, with an initial close of €50 million. That’s more than twice the size of its first fund, which topped out at €20 million.
Its remit remains largely the same, however. The company typically invests between €150k and €800k in teams that have “deep domain expertise” and are building globally competitive tech companies according to Icebreaker co-founder and partner Riku Seppälä.
Noteworthy, this goes right to the top of the funnel and includes backing and helping to connect “pre-founders,” defined as individuals with over 5 years of work experience in their domain who are aiming to start or join a tech company. As part of this effort, Icebreaker operates an online and offline community to act as a catalyst for new companies to be founded.
Meanwhile, I’m told that Fund II was signed just as the coronavirus crisis began to take hold and includes the majority of LPs from Fund I in addition to new investors. Lead LPs are Tesi, KRR III, Varma Mutual Pension Insurance Company and Elo Mutual Pension Insurance Company, together with 41 other entities consisting of institutional investors, family offices and founders.
To find out more about Fund II and what’s it’s like to launch a new pre-seed fund at a time of such uncertainty, and to understand how Icebreaker thinks about startup life during and after lockdown, I put questions to Icebreaker co-founder and Partner Riku Seppälä.
TechCrunch: What does it feel like to close a new fund right at the start of a pandemic?
Riku Seppälä: Of course, we have been distracted by the mounting health crisis and how the world economy will recover, so the feelings are mixed.
Powered by WPeMatico
Mobile gaming is a $68.5 billion global business, and investors are buying in
Omer Kaplan
Contributor
Contributor
Omer Kaplan is CMO and co-founder at ironSource.
More posts by this contributor
By the end of 2019, the global gaming market is estimated to be worth $152 billion, with 45% of that, $68.5 billion, coming directly from mobile games. With this tremendous growth (10.2% YoY to be precise) has come a flurry of investments and acquisitions, everyone wanting a cut of the pie. In fact, over the last 18 months, the global gaming industry has seen $9.6 billion in investments and if investments continue at this current pace, the amount of investment generated in 2018-19 will be higher than the eight previous years combined.
What’s interesting is why everyone is talking about games, and who in the market is responding to this — and how.
The gaming phenomenon
Today, mobile games account for 33% of all app downloads, 74% of consumer spend and 10% of all time spent in-app. It’s predicted that in 2019, 2.4 billion people will play mobile games around the world — that’s almost one-third of the global population. In fact, 50% of mobile app users play games, making this app category as popular as music apps like Spotify and Apple Music, and second only to social media and communications apps in terms of time spent.
In the U.S., time spent on mobile devices has also officially outpaced that of television — with users spending eight more minutes per day on their mobile devices. By 2021, this number is predicted to increase to more than 30 minutes. Apps are the new prime time, and games have grabbed the lion’s share.
Accessibility is the highest it’s ever been as barriers to entry are virtually non-existent. From casual games to the recent rise of the wildly popular hyper-casual genre of games that are quick to download, easy to play and lend themselves to being played in short sessions throughout the day, games are played by almost every demographic stratum of society. Today, the average age of a mobile gamer is 36.3 (compared with 27.7 in 2014), the gender split is 51% female, 49% male, and one-third of all gamers are between the ages of 36-50 — a far cry from the traditional stereotype of a “gamer.”
With these demographic, geographic and consumption sea-changes in the mobile ecosystem and entertainment landscape, it’s no surprise that the game space is getting increased attention and investment, not just from within the industry, but more recently from traditional financial markets and even governments. Let’s look at how the markets have responded to the rise of gaming.
Image courtesy of David Maung/Bloomberg via Getty Images
Games on games
The first substantial investments in mobile gaming came from those who already had a stake in the industry. Tencent invested $90 million in Pocket Gems and$126 million in Glu Mobile (for a 14.6% stake), gaming powerhouse Supercell invested $5 million in mobile game studio Redemption Games, Boom Fantasy raised $2M million from ESPN and the MLB and Gamelynx raised $1.2 million from several investors — one of which was Riot Games. Most recently, Ubisoft acquired a 70% stake in Green Panda Games to bolster its foot in the hyper-casual gaming market.
Additionally, bigger gaming studios began to acquire smaller ones. Zynga bought Gram Games, Ubisoft acquired Ketchapp, Niantic purchased Seismic Games and Tencent bought Supercell (as well as a 40% stake in Epic Games). And the list goes on.
Wall Street wakes up
Beyond the flurry of investments and acquisitions from within the game industry, games are also generating huge amounts of revenue. Since launch, Pokémon GO has generated $2.3 billion in revenue and Fortnite has amassed some 250 million players. This is catching the attention of more traditional financial institutions, like private equity firms and VCs, which are now looking at a variety of investment options in gaming — not just of gaming studios, but all those who have a stake in or support the industry.
In May 2018, hyper-casual mobile gaming studio Voodoo announced a $200 million investment from Goldman Sachs’ private equity investment arm. For the first time ever, a mobile gaming studio attracted the attention of a venerable old financial institution. The explosion of the hyper-casual genre and the scale its titles are capable of achieving, together with the intensely iterative, data-driven business model afforded by the low production costs of games like this, were catching the attention of investors outside of the gaming world, looking for the next big growth opportunity.
The trend continued. In July 2018, private equity firm KKR bought a $400 million minority stake in AppLovin and now, exactly one year later, Blackstone announced their plan to acquire mobile ad-network Vungle for a reported $750 million. Not only is money going into gaming studios, but investments are being made into companies whose technology supports the mobile gaming space. Traditional investors are finally taking notice of the mobile gaming ecosystem as a whole and the explosive growth it has produced in recent years. This year alone mobile games are expected to generate $55 billion in revenue, so this new wave of investment interest should really come as no surprise.
A woman holds up her cell phone as she plays the Pokemon GO game in Lafayette Park in front of the White House in Washington, DC, July 12, 2016. (Photo: JIM WATSON/AFP/Getty Images)
Government intervention
Most recently, governments are realizing the potential and reach of the gaming industry and making their own investment moves. We’re seeing governments establish funds that support local gaming businesses — providing incentives for gaming studios to develop and retain their creatives, technology and employees locally — as well as programs that aim to attract foreign talent.
As uncertainty looms in England surrounding Brexit, France has jumped on the opportunity with “Join the Game.” They’re painting France as an international hub that is already home to many successful gaming studios, and they’re offering tax breaks and plenty of funding options — for everything from R&D to the production of community events. Their website even has an entire page dedicated to “getting settled in France,” in English, with a step-by-step guide on how game developers should prepare for their arrival.
The U.K. Department for International Trade used this year’s Game Developers Conference as a backdrop for the promotion of their games fund — calling the U.K. “one of the most flourishing game developing ecosystems in the world.” The U.K. Games Fund allows for both local and foreign-owned gaming companies with a presence in the U.K. to apply for tax breaks. And ever since France announced their fund, more and more people have begun encouraging the British government to expand their program, saying that the U.K. gaming ecosystem should be “retained and enhanced.” But, not only does the government take gaming seriously, the Queen does as well. In 2008, David Darling, the CEO of hyper-casual game studio Kwalee, was made a Commander of the Order of the British Empire (CBE) for his services to the games industry. CBE is the third-highest honor the Queen can bestow on a British citizen.
Over in Germany, and the government has allocated €50 million of its 2019 budget for the creation of a games fund. In Sweden, the Sweden Game Arena is a public-private partnership that helps students develop games using government-funded offices and equipment. It also links students and startups with established companies and investors. While these numbers dwarf the investment of more commercial or financial players, the sudden uptick in interest governments are paying to the game space indicate just how exciting and lucrative gaming has become.
Support is coming from all levels
The evolution of investment in the gaming space is indicative of the stratospheric growth, massive revenue, strong user engagement and extensive demographic and geographic reach of mobile gaming. With the global games industry projected to be worth a quarter of a trillion dollars by 2023, it comes as no surprise that the diverse players globally have finally realized its true potential and have embraced the gaming ecosystem as a whole.
Powered by WPeMatico
Pitching a $99 tax advisory service for the masses, Visor has raised $9 million
The only sure things in this life, according to Ben Franklin, are death and taxes. And a new startup called Visor has just raised $9 million in financing to make one of them as painless as possible.
Unlike Nectome, Visor won’t kill anyone, but it may ring the death knell for the high-end tax advisors that most Americans can’t even access to get help filing and paying their taxes. It’s like having a personalized accountant for the cost of a high-end do-it-yourself tax-prep service.
The $9 million Visor raised came from the venture capital firm Defy, with participation from Unusual Ventures, SVB Capital and existing investors like Obvious Ventures, Fika Ventures and Boxgroup, which had put a previous $6.5 million into the company.
The idea for the company had been percolating for co-founder and chief executive Gernot Zacke since he settled in the U.S.
Growing up in Sweden, Zacke was exposed to a much different process for paying taxes. “The experience of filing taxes in Sweden is that you receive a message from the government that stated how much you made and how much you were withholding. That’s it,” said Zacke. “Taxes should be as easy as ordering a cab.”
That’s the service that Visor aims to provide.
“If you think about the market there are two ways to get your taxes done. There’s the DIY space and then there are other online services but it requires the tax payer to fill out the forms and it leaves the tax payer with a little bit of anxiety,” said Zacke. “We’re delivering the CPA experience through the convenience of a web app and a mobile app.”
On average, Americans spend about 13 hours each year dealing with taxes, and the average American doesn’t have the benefits of a professional advisor who can help optimize the process. That’s what Visor wants to provide.
“You provide the same amount of information you provide to a CPA or TurboTax… we make sure that that information is filed securely on AWS and shared between the docs and the backend,” said Zacke.
The target customers for Zacke’s services are folks who have had a change to their tax situation — whether moving, buying a home or any other life event; or folks who have had a CPA and don’t want to pay the higher fees, he said.
Visor currently has an operations team of around 34 people split between San Francisco and Atlanta.
For Zacke, the pain point he’s solving with the Visor service is very real. A former employee of the European investment firm Atomico, Zacke bounced between the U.S. and Europe — eventually running U.S. investments for the firm before leaving to launch Visor.
Other co-founders and senior executives hail from the tax advisory world, and from employee benefits outsourcing services company Zenefits, along with former Venmo and Square developers.
“Taxpayers spend $20 billion a year to get their taxes prepared and are stuck between spending hours filling out DIY tax software and hiring an expensive CPA,” said Zacke, in a statement. “
Powered by WPeMatico
Natural Cycles contraception app told to clarify pregnancy risks
A multi-month investigation by Sweden’s Medical Products Agency into a number of unwanted pregnancies among users of ‘digital contraception’ app Natural Cycles has been closed after the startup agreed to clarify the risk of the product failing.
But, on the self-reported data front, the agency said it was satisfied the number of unwanted pregnancies is in line with Natural Cycles’ own clinical evaluations which are included in the certification documentation for the product.
In its marketing and on its website Natural Cycles describes the app-based system as “93% effective under typical use” — a finding that’s based on a clinical study it conducted of more than 22,000 of its users.
The investigation by Sweden’s MPA began around eight months ago, after a number of users in Natural Cycle’s home market had reported unwanted pregnancies to a local hospital — which then reported the app to the regulator.
The Natural Cycles app uses an algorithm to track fertility by monitoring the user’s menstrual cycle. The process requires women take their body temperature at least several times a week, and do so first thing in the morning, inputting the data into the app which is designed to adapts its ‘fertile’ or ‘not fertile’ predictions to each user’s cycle.
Several users have reported falling pregnant while using the app. But the proportion of women who have done so (at least in Sweden) is in line with efficacy rates reported by Natural Cycles, according to the regulator’s assessment.
Earlier this year the MPA said it had received “approximately 50 complaints” related to unwanted pregnancies in users of the app. But late last week it announced it had concluded its assessment of the app — which it said focused on “product safety, instructions for use and post market surveillance documentation in order to confirm if the product is in compliance with regulations”.
As well as looking at parts of the certification documentation for Natural Cycles, the agency says it assessed monthly reports of unwanted pregnancies among active app users in Sweden, covering a six-month period — with pregnancy data supplied by the company itself on a month by month basis during the first half of 2018.
The agency found the number of reported unwanted pregnancies reported by users to be in line with Natural Cycles’ certification documents for the product, finding a failure rate in typical use of 6.9%.
But it also asked the company to clarify the risk of unwanted pregnancies in instructions for the app.
“Our conclusion is that the number of unwanted pregnancies during the assessed time period is consistent with data shown in the clinical evaluation included in the certification documentation. Since it is important that a contraception app is correctly used, we requested the manufacturer to clarify the risk of unwanted pregnancies in the instructions for use and in the app. These issues have been addressed by Natural Cycles and thereby our review is completed,” said Mats Artursson, investigator at the agency in a statement.
As we reported earlier this year, the startup has lent heavily on aggressive social media marketing of its novel ‘digital contraception’ method — which has sometimes appeared to downplay the risk of failure for what is undoubtedly a relatively complex contraception option, given it requires users to consistently self-monitor (and accurately measure their body temperature) as well as use alternative contraception on days when the app informs them they are fertile.
Natural Cycles admits that factors such as illness, disrupted sleep, drinking alcohol and having an irregular menstrual cycle can have a negative impact on the accuracy of its algorithmic fertility predictions. And says itself that the method is not a suitable contraception choice for every individual.
Nor does the app offer any protection against STDs — unless users combine it with additional barrier methods of contraception.
But despite that, until very recently on its website (and in some of its marketing) Natural Cycles has been making the misleading claim that its contraception app is “99% effective” if used “perfectly”. (Perfect use implying, well, superhuman use.)
And just last month the company was wrapped on the knuckles by the UK’s Advertising Standards Authority — which banned one of its social media ads for being misleading, also warning the company against exaggerating the efficacy of the app in preventing pregnancies.
The assessment by the Swedish MPA looks to have reached similar conclusions about certain aspects of the claims Natural Cycles’ has been making for the app.
When we covered the ASA’s ruling last month Natural Cycle’s website still included the misleading 99% ‘perfect use’ claim — within this confusingly worded paragraph: “With using the app perfectly, i.e. if you never have unprotected intercourse on red days, Natural Cycles is 99% effective, which means 1 woman out of 100 get pregnant during one year of use.”
It’s since scrubbed the paragraph from its website, focusing solely on the 93% effective stat — on which it now writes: “Natural Cycles is 93% effective under typical use, which means that 7 women out of 100 get pregnant during 1 year of use. Typical use effectiveness takes into account all possible reasons for becoming pregnant while using the app: from having unprotected sex on a red day, to the app wrongly attributing a green day or the chosen method of contraception on a red day having failed.”
It’s not clear whether Natural Cycles removed the 99% ‘perfect use’ claim as a result of the ASA ruling — or following the Swedish MPA’s assessment. (We’ve asked the company to clarify the exact changes it made related to the MPA’s findings, which the regulator also says relate to software versioning, and will update this story with any response.)
Its app gained certification as a contraception in the EU in February 2017, and went on to gain FDA clearance (via a De Novo classification request) this summer — giving the product a major credibility boost, even as regulatory clearances still come with plenty of caveats. (In the FDA‘s case it warns that: “Users must be aware that even with consistent use of the device, there is still a possibility of unintended pregnancy.”)
It’s also worth noting that it’s still the case that Natural Cycles has not carried out a randomized control trial to more robustly prove out the efficacy of the product, i.e. by using standard scientific methods.
Instead, users must rely on the findings of its self-selecting clinical study of its own users — which may have its own weaknesses, given that, for example, any user who fails to report an unwanted pregnancy to Natural Cycles would not be reflected in the data it’s providing to regulators.
Commenting on the conclusion of the Swedish MPA’s investigation in a statement, Natural Cycles CEO Raoul Scherwitzl said: “We are pleased that the MPA has concluded its investigation, following a review of our real-world effectiveness data. There has been a lot of discussion about this investigation, and we hope that it will provide some reassurance to women to see eminent bodies like the Swedish MPA and the US FDA in alignment based on the strength of our clinical evidence. We never doubted the effectiveness of our product since the number of reported pregnancies is monitored closely on a monthly basis — this is an ongoing responsibility that we commit to as part of operating in a regulated environment.”
Powered by WPeMatico