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With Goat Capital, Justin Kan and Robin Chan want to keep founding alongside the right teams
Justin Kan and Robin Chan have each been angel investing for more than a decade. They’re starting a new fund together now, though, to stay involved as cofounders of more startups.
Goat Capital is a hybrid incubator versus a pure seed investment firm, Chan explains. It will be writing checks ranging between roughly half a million and $3 million dollars, and it is only planning to raise $40 million — so the checks will be selective.
The offering is that “you’re going to be working with Justin and Robin,” he says, as a direct collaboration to help your company succeed. With $25 million closed already from themselves and several family offices, the fund has begun investing globally with particular interests in digital health, ecommerce, digital entertainment and gaming, robotics and climate change.
The goal is not just about being the Greatest Of All Time, Kan adds. In a startup, you “climb high heights and eat shit to get there. That tenacity is what we want.”
It’s a nod to their own successes and struggles as founders over the years, and what they have seen as investors and advisors to a wide range of companies around the world (Twitter, Xiaomi, Bird, Uber, Square, Ginkgo Bioworks, Scale.ai, Cruise, Razorpay, Xendit, Equipment Share, Wave, Teachable, Semantic Machines, Rippling, Built Robotics, etc.)
Kan was a cofounder of Justin.tv, which became Twitch as well as Socialcam. He later had an on-demand company called Exec and previously a calendar app called Kiko, both of which sold for small amounts. Most recently, he took a big shot at the traditional legal industry with Atrium, a law firm and legal software startup that raised big rounds of funding before shuttering earlier this year.
His prototype for Goat is Alto Pharmacy, a booming digital health unicorn today that the founders started in his living room.
“We do think founders should be treated like athletes, going for gold really hard… the Olympic metaphor,” Kan qualifies about the name. “That means grinding for years — and having to rest, too. I’m very passionate about mental health and wellness as part of the journey.” (More on that here.)
Chan, meanwhile, sold his gaming startup in China to Zynga a decade ago, then helped lead a failed attempt to buy Blackberry before founding Operator, a well-funded ecommerce company that closed a few years ago. During the pandemic, he helped create Operation Masks, a nonprofit that has been providing PPE across the US. He’s also an ongoing advisor to Sleeper, Bird, Expa and Flipboard.
The focus will be fully global now. Chan explains that even though you’re seeing more challenges to building a truly global company these days, there’s more space for local startups to win big.
“There’s the US internet, the China internet, the India internet, the EU internet — in some ways it makes those markets more valuable to win, like traditional media. Broadcast and cable are highly geographic but the franchise value becomes higher because of the regulatory moat.”
Chan, on that note, met Kan back when he was a director at [current TechCrunch owner] Verizon Wireless, when Justin.tv was trying to negotiate for free data. When I asked if they had worked out a deal during a phone interview, Kan said “you [expletive] didn’t.”
But it did lead to other co-investments later on, including Ramp, Workstream and others, and now this fund.
Today, Kan says that the focus on teams will be as flexible as the times. “When we started, the internet was America,” he says. “If you weren’t there, you weren’t a company. It’s been a complete reversal of that. Now teams are international, talent is international, more and more companies are building remote first — although you’d seen that before given the costs of the Bay. We have an entirely remote company in North Carolina, Grammarly in Europe… it’s more and more the norm. Smart founders are going anywhere to find talent.
For the two partners, this new fund will be about staying connected to that certain startup feeling that is elusive for anyone trying to build something great.
“There’s nothing more magical than being in the first step of a special company,” Chan says. “That glimpse of the future. We wouldn’t get the same feeling at the growth stage versus working with small teams or a single founder. I think we have the instinct.”
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Amazon and Zynga partner on Word Pop, a Words with Friends spinoff created for Alexa
Zynga’s popular game, Words with Friends, is coming to Alexa. The new voice-powered game will be known as Word Pop, and — sorry — you can’t actually play it with friends right now, even though the game lives within Zynga’s broader Words with Friends franchise. Instead, the new Alexa voice game is viewed as a complement to Zynga’s multiplayer version. It’s a place where players can sharpen their word-building skills, no friends required.
To launch Word Pop, you’ll say “Alexa, open Word Pop” on any Alexa device to get started.
In the game, Alexa will challenge the players to create as many words as possible from a six-letter bank, through a series of one-minute sessions. During this time, players must say or spell as many words as they can, while earning points for both the number and length of the words they find.
On Alexa devices with a screen, like the Echo Show, there will also be a visual component where players will see their letter banks and completed words. Arguably, the game is better this way as it allows you to view the letters and combinations much like you can on a mobile device or computer. Without the screen, the game will prove much more challenging — though that may appeal to some Words with Friends experts.
The companies characterize their teaming up on the new title as a “partnership,” where both Amazon and Zynga’s teams worked together to build the game. However, there isn’t currently a revenue-sharing situation, we understand, as the game is free and doesn’t offer in-app purchases. (Of course, if the title proves popular enough, the companies could likely revisit that decision.)
In the meantime, however, the companies see the opportunity to build their respective brands. Zynga can generate interest in its aging, cross-platform Words with Friends franchise by way of the new Alexa skill, while Amazon gets to introduce the idea of Alexa gaming to consumers via a well-known industry brand and popular game that users will already know how to play.
“I’m thrilled that by adding Word Pop to the Words With Friends family, players will be able to test and improve their word skills, making them even better Words With Friends players,” said Bernard Kim, president of Publishing at Zynga, in a statement. “The beauty of Words With Friends is that even after ten years, we’re still discovering new ways for the franchise to bring joy to players around the world. We’re dedicated to experimenting with services such as Alexa and game modes like Word Pop, which gives players a familiar, yet novel experience.”
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Despite pandemic, gaming is well-positioned to withstand recession
Efforts to slow the spread of COVID-19 have led to a global economic downturn, but the gaming industry is booming.
With hundreds of millions of people sequestered in their homes, game usage has spiked. And while the economic repercussions will persist after people cease physical distancing, gaming is positioned to fare well during a recession.
Video game usage increased 75% during peak hours
Video game usage during peak hours increased 75% in the first week many Americans began staying home, according to Verizon data. Game distribution platform Steam set a record for peak concurrent users (more than 20 million) on March 16 without any notable new releases driving demand. Gaming chat platform Discord saw its servers go down briefly last week even after the company increased capacity by more than 20% to handle surging usage.
According to Siamc Kamalie, manager of hedge fund Skycatcher, “average time spent per user on mobile games grew 41% during Chinese New Year in 2020 versus 2019, and was up 18% versus the week prior to Chinese New Year in 2020.” (Chinese New Year is when widespread stay-at-home orders began in China.)
All of the gaming industry professionals I’ve spoken to over the last week noted increased popularity of their games, though most were wary of sharing their strong performance publicly, given the unfortunate circumstances.
People don’t just turn to games for entertainment; especially when in-person interactions are restricted and most of the most popular games are multiplayer in one form or another — games also serve as social hangout spots.
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Greylock’s Reid Hoffman and Sarah Guo to talk fundraising at Early Stage SF 2020
Early Stage SF is around the corner, on April 28 in San Francisco, and we are more than excited for this brand new event. The intimate gathering of founders, VCs, operators and tech industry experts is all about giving founders the tools they need to find success, no matter the challenge ahead of them.
Struggling to understand the legal aspects of running a company, like negotiating cap tables or hiring international talent? We’ve got breakout sessions for that. Wondering how to go about fundraising, from getting your first yes to identifying the right investors to planning the timeline for your fundraise sprint? We’ve got breakout sessions for that. Growth marketing? PR/Media? Building a tech stack? Recruiting?
We. Got. You.
Hoffman + Guo
Today, we’re very proud to announce one of our few Main Stage sessions that will be open to all attendees. Reid Hoffman and Sarah Guo will join us for a conversation around “How To Raise Your Series A.”
Reid Hoffman is a legendary entrepreneur and investor in Silicon Valley. He was an Executive VP and founding board member at PayPal before going on to co-found LinkedIn in 2003. He led the company to profitability as CEO before joining Greylock in 2009. He serves on the boards of Airbnb, Apollo Fusion, Aurora, Coda, Convoy, Entrepreneur First, Microsoft, Nauto and Xapo, among others. He’s also an accomplished author, with books like “Blitzscaling,” “The Startup of You” and “The Alliance.”
Sarah Guo has a wealth of experience in the tech world. She started her career in high school at a tech firm founded by her parents, called Casa Systems. She then joined Goldman Sachs, where she invested in growth-stage tech startups such as Zynga and Dropbox, and advised both pre-IPO companies (Workday) and publicly traded firms (Zynga, Netflix and Nvidia). She joined Greylock Partners in 2013 and led the firm’s investment in Cleo, Demisto, Sqreen and Utmost. She has a particular focus on B2B applications, as well as infrastructure, cybersecurity, collaboration tools, AI and healthcare.
The format for Hoffman and Guo’s Main Stage chat will be familiar to folks who have followed the investors. It will be an updated, in-person combination of Hoffman’s famously annotated LinkedIn Series B pitch deck that led to Greylock’s investment, and Sarah Guo’s in-depth breakdown of what she looks for in a pitch.
They’ll lay out a number of universally applicable lessons that folks seeking Series A funding can learn from, tackling each from their own unique perspectives. Hoffman has years of experience in consumer-focused companies, with a special expertise in network effects. Guo is one of the top minds when it comes to investment in enterprise software.
We’re absolutely thrilled about this conversation, and to be honest, the entire Early Stage agenda.
How it works
Here’s how it all works:
There will be about 50+ breakout sessions at the event, and attendees will have an opportunity to attend at least seven. The sessions will cover all the core topics confronting early-stage founders — up through Series A — as they build a company, from raising capital to building a team to growth. Each breakout session will be led by notables in the startup world.
Don’t worry about missing a breakout session, because transcripts from each will be available to show attendees. And most of the folks leading the breakout sessions have agreed to hang at the show for at least half the day and participate in CrunchMatch, TechCrunch’s app to connect founders and investors based on shared interests.
Here’s the fine print. Each of the 50+ breakout sessions is limited to around 100 attendees. We expect a lot more attendees, of course, so signups for each session are on a first-come, first-serve basis. Buy your ticket today and you can sign up for the breakouts that we’ve announced. Pass holders will also receive 24-hour advance notice before we announce the next batch. (And yes, you can “drop” a breakout session in favor of a new one, in the event there is a schedule conflict.)
Grab yourself a ticket and start registering for sessions right here. Interested sponsors can hit up the team here.
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Mobile gaming is a $68.5 billion global business, and investors are buying in
Omer Kaplan
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Omer Kaplan is CMO and co-founder at ironSource.
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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.
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WeWork CEO Adam Neumann has reportedly cashed out of over $700 million ahead of its IPO
Adam Neumann, the co-founder and chief executive of the international real estate co-working startup WeWork has reportedly cashed out of more than $700 million from his company ahead of its initial public offering.
The size and timing of the payouts, made through a mix of stock sales and loans secured by his equity in the company, is unusual, considering that founders typically wait until after a company holds its public offering to liquidate their holdings.
Despite the loans and sales of stock, first reported by The Wall Street Journal, Neumann remains the single largest shareholder in the company.
According to the Journal’s reporting, Neumann has already set up a family office to invest the proceeds and begun to hire financial professionals to run it.
He’s also made significant investments in real estate in New York and San Francisco, including four homes in the greater New York metropolitan area, and a $21 million, 13,000-square-foot house in the Bay Area, complete with a guitar-shaped room (I guess a fiddle would be too on the nose). In all, Neumann reportedly spent $80 million on real estate.
Neumann has also invested in commercial real estate (the kind that WeWork leases to provide work space with more flexible leases for companies and entrepreneurs), including properties in San Jose, Calif. and New York. Indeed, four of Neumann’s properties are leased to WeWork — to the tune of several million dollars in rent. According to the Journal, Neumann will transfer those property holdings to a WeWork-controlled fund.
The WeWork chief executive has also invested in startups in recent years. He’s got an equity stake in seven companies: Hometalk, Intercure, EquityBee, Selina, Tunity, Feature.fm and Pins, according to CrunchBase.
The rewards that Neumann is reaping from the loans and stock sales are among the highest recorded by a private company executive. In recent years, Evan Spiegel sold $8 million in stock and borrowed $20 million from Snap before its 2017 public offering, and Slack Technologies chief executive Stewart Butterfield sold $3.2 million of stock before Slack’s public offering in June.
The only liquidation of stock and other payouts that have been disclosed that come close to Neumann’s payouts are the $300 million that Groupn co-founder Eric Lefkofsky sold before his company’s IPO and the over $100 million that Mark Pincus took off the table ahead of Zynga’s offering.
WeWork declined to comment for this article.
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India’s FreshToHome raises $11 million to expand its fish, meat, and vegetable e-commerce platform
Shan Kadavil, who spent early days of his career managing tech support firm Support and then heading India operations of gaming firm Zynga, says he had a calling of sorts when his son was born. Kadavil realized that much of the meat that sells in India is not exactly healthy. The perishables are loaded with chemicals to superficially extend their life by six months, if not more. He wanted to do something better.
Fast forward four years, Kadavil said today that FreshToHome, his new e-commerce startup that delivers “100 percent” pure and fresh fish, chicken, and other kinds of meat, has raised $11 million in Series A funding. The startup has raised $13 million to date.
The round was led by CE Ventures, with participation from Das Capital, Kortschak Investments, TTCER Partners, Al-Nasser Holdings, M&S Partners and other Asia and Valley based Investors. Some of the backers of FreshToHome include Rajan Anandan, the former head of Google Southeast Asia, David Krane, CEO of GV, and Mark Pincus, chairman of Zynga.
FreshToHome has already courted 400,000 customers across four cities — Bengaluru, NCR (Delhi, Gurgaon, Noida, Faridabad, Ghaziabad & Greater Noida), Chennai and Kerala (Kochi, Trivandrum, Calicut & Trichur) — in India. On the backend, the startup does business with 1,500 fishermen across 125 coasts.
In an interview with TechCrunch, Kadavil said the startup is trying to “Uber-ize farmers and fishmen in India. We are giving them an app — around which we have a US patent — for commodity exchange. What farmers and fishermen do is they bid with us (as mandated by local laws) electronically using the app.” By dealing directly with the source, the startup is eliminating as many as half a dozen middlemen to cut costs.
The startup has built its own supply chain network. “We have got a 1,000 people, 100 trucks, and 40 collection points.” The startup, which also uses trains and planes to move inventory, has become one of the biggest clients of airlines Indigo and SpiceJet, he added. Kadavil claimed that FreshToHome is also the largest e-commerce platform for meat with $1.73 million in GMV sales each month.
If this all sounds well strategized, it is because of the people who are running the show. Kadavil founded the FreshToHome with Mathew Joseph, a veteran in the industry who has dealt with fish export for more than 30 years. Joseph started India’s first e-commerce venture in fish and meat called SeaToHome in 2012.
FreshToHome has also emerged as a micro-VC to farmers where it is doing cooperative farming. In such model, FreshToHome guides farmers to use the latest technologies to produce certain kind of fish. As of today, the startup is seeing 60,000 kg (132,227 pound) of production in cooperative farming through its marketplace and over 400,000 kg (881,849 pound) of total products sold per month.
FreshToHome will use the fresh capital to expand its supply chain network, connect with as many as 8,500 new farmers, and start delivering vegetables. It already delivers vegetables in Bengaluru. Kadavil said the startup will also expand to two more cities — Mumbai and Pune.
FreshToHome will compete with a handful of startups, including Licious, which has raised more than $35 million to date, ZappFresh, and BigBasket, which just earlier this month raised $150 million. The cold-chain market of India is estimated to grow to $37 billion in next five years.
In a prepared statement, Tushar Singhvi, Director of CE Ventures said, “The Meat and Seafood segment in India is pegged to be a 50 billion dollar market, but we have to keep in mind that it’s a highly fragmented industry. FreshToHome.com is not only trying to streamline the industry, they’re also using technology to revolutionize the way the industry functions by disintermediating the supply chain, eliminating the middleman and working directly with the fishermen and farmers in a market place model, to make fresh and chemical free food accessible to the masses at large.”
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Snapchat launches Mario Party-style multiplayer games platform
Snap is unlocking a new revenue stream while giving you something to do between chats and Stories. Today Snapchat debuts its Snap Games platform that lets you play real-time, multiplayer games while texting and talking with your friends. The platform is based on Snap’s secret late-2017 acquisition of PrettyGreat, an Australian game studio with talent from HalfBrick (which built Fruit Ninja). That team built Bitmoji Party, a Mario Party-style mini-game fest, to show off the platform that includes five games from developers like Zynga and ZeptoLab. The games are rolling out worldwide on iOS and Android starting today.
To monetize the platform, Snapchat will let users opt in to watching six-second unskippable commercials that reward them with a power up or bonus in-game currency. Snapchat will share revenue from the ads with developers, though it refused to specify the split. It could be a little weird watching ads to more easily beat your friends. But down the line it’s easy to imagine Snapchat selling cosmetic upgrades via in-app purchases akin to Fortnite.
Snap announced the new Snap Games platform at its first-ever press event, the Snap Partner Summit in Los Angeles, where it also announced an augmented reality utility platform called Scan, an ads network and a way to put its Stories in other apps. “We wanted to build something that makes us feel like we’re playing a board game with a family of over a long holiday weekend. Something that makes us feel like we’re sitting with friends, controllers in hand, looking at the same screen,” says Snap’s head of gaming, Will Wu. The Information’s Tom Dotan and Amir Efrati first reported Snap was building a gaming platform and Cheddar’s Alex Heath reported it would end up launching today.
Snap Games could be considered a real-time spin on Facebook Messenger’s Instant Games platform, which has focused on porting to HTML5 well-known asynchronous games like Pac-Man and other arcade titles. Similarly, Snap Games don’t have to be downloaded separately, as they’re piped in from the web. Users can browse available games by tapping a new rocket ship button in the chat bar.
You’re invited to Bitmoji Party
#SnapPartnerSummit pic.twitter.com/WBTntkqZil
— Snapchat (@Snapchat) April 4, 2019
With Bitmoji Party, your avatar competes with up to seven friends simultaneously in a series of mini games where you have to stay balanced on a giant record as a DJ scratches it, or avoid getting knocked in the pool. You also can have another 24 friends spectate and rotate in. Winners earn coins they can use to buy dances to stunt on their competition. And with an ever-present chat bar, users can use text or voice to talk trash.
Rather than port in known IP, Snap recruited developers to build games exclusively for its vertical, real-time multiplayer format. These include:
- Alphabear Hustle from SpryFox – a fast-paced word puzzler
- C.A.T.S. (Crash Arena Turbo Stars) Drift Race from ZeptoLab – a cutesy racing game
- Snake Squad from Game Closure – a reimagining of the classic Snake game set in outer space
- Tiny Royale from Zynga – a top-down battle royale shooter game that feels like a Game Boy version of Fortnite top-down battle royale game
- Zombie Rescue Squad from PikPok – a zombie shooter
Snapchat’s partner games (from left): Tiny Royale, Snake Squad, C.A.T.S. Drift Race
Snap’s game platform has huge potential to boost time spent in the app and the ads views that generates because gaming is perfect for its demographic. “In the United States, Snapchat now reaches nearly 75 percent of all 13 to 34-year-olds, and we reach 90 percent of 13 to 24-year-olds. In fact, we reach more 13 to 24-year-olds than Facebook or Instagram in the United States, the U.K., France, Canada and Australia,” Snap CEO Evan Spiegel revealed today. This is the age group with the free time and dense social graphs to make use of multiplayer real-time games.
The big question is whether Snap’s reward-incentivized video ad views will generate enough cash to keep developers coming to the platform. If not, a limited line of titles could get old quick. Snap has entirely avoided in-app purchases since shutting down its Lens Store in early 2016. There’s understandable concern that kids could rack up huge bills on their parents’ credit cards. But given how Fortnite has normalized paying for no-utility cosmetic upgrades for this same demographic, with the right controls Snapchat could do the same to make itself and its partners a lot more money. And given you’re always playing with your friends, not strangers, there’s an even deeper urge to buy funny costumes and dances to impress them.
Snapchat’s overarching strategy right now is to build an orbit of time-wasters surrounding chat. What began with Stories now includes Discover publications, premium Shows, augmented reality toys and now games. It may never become a favorite with the 35+ age group. But since messaging is the top mobile behavior, Snap can use it to keep people coming back and then distract them while they’re waiting for a reply or need a social alternative to small talk.
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Consolidation is coming to gaming, and Jam City raises $145 million to capitalize on it
A slew of banks are coming together to back a new roll-up strategy for the Los Angeles-based mobile gaming studio Jam City and giving the company $145 million in new funding to carry that out.
There’s no word on whether the new money is in equity or debt, but what is certain is that JPMorgan Chase Bank, Bank of America Merrill Lynch and syndicate partners, including Silicon Valley Bank, SunTrust Bank and CIT Bank, are all involved in the deal.
“In a global mobile games market that is consolidating, Jam City could not be more proud to be working with JPMorgan, Bank of America Merrill Lynch, Silicon Valley Bank, SunTrust Bank and CIT Group to strategically support the financing of our acquisition and growth plans,” said Chris DeWolfe, co-founder and CEO of Jam City. “This $145 million in new financing empowers Jam City to further our position as a global industry consolidator. As we grow our global business, we are honored to be working alongside such prestigious advisers who share Jam City’s mission of delivering joy to people everywhere through unique and deeply engaging mobile games.”
The new money comes after a few years of speculation on whether Jam City would be the next big Los Angeles-based startup company to file for an initial public offering. It also follows a new agreement with Disney to develop mobile games based on intellectual property coming from all corners of the mouse house — a sweet cache of intellectual property ranging from Pixar, to Marvel, to traditional Disney characters.
Jam City is coming off a strong year of company growth. The Harry Potter: Hogwarts Mystery game, which launched last year, became the company’s fastest title to hit $100 million in revenue.
Add that to the company’s expansion into new markets with strategic acquisitions to fuel development and growth in Toronto and Bogota and it’s clear that the company is looking to make more moves in 2019.
Jam City already holds intellectual property for a new game built on Disney’s “Frozen 2,” the company’s newly acquired Fox Studio assets like “Family Guy” and the Harry Potter property. Add that to its own Cookie Jam and Panda Pop properties and it seems like the company is ready to make moves.
Meanwhile, games are quickly becoming the go-to revenue driver for the entertainment industry. According to data collected by Newzoo, mobile games revenue reached a record $63.2 billion worldwide in 2018, representing roughly 47 percent of the total revenue for the gaming industry in the year. That number could reach $81.3 billion by 2020, the Newzoo data suggests.
Roughly half of the U.S. plays mobile games, and they’re spending significant dollars on those games in app stores. App Annie suggests that roughly 75 percent of the money spent in app stores over the past decade has been spent on mobile games. And consumers are expected to spend roughly $129 billion in app stores over the next year. The data and analytics firm suggests that mobile gaming will capture some 60 percent of the overall gaming market in 2019, as well.
All of that bodes well for the industry as a whole, and points to why Jam City is looking to consolidate. And the company isn’t the only mobile games studio making moves.
The publicly traded games studio Zynga, which rose to fame initially on the back of Facebook’s gaming platform, recently expanded its European footprint with the late-December acquisition of the Helsinki-based gaming studio Small Giant Games.
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Zynga to acquire Small Giant Games, the maker of Empires & Puzzles, for $700M
Social game developer Zynga has entered into an agreement to acquire Small Giant Games, the startup behind the popular mobile game Empires & Puzzles, in a deal expected to total $700 million.
Zynga, which has tumbled since its 2011 Nasdaq initial public offering, will initially acquire 80 percent of Small Giant Games for $560 million, composed of $330 million in cash and $230 million of unregistered Zynga common stock. Zynga will fund part of the transaction with a $200 million credit facility.
“We’ve been impressed by the quality and momentum of Empires & Puzzles as we add another Forever Franchise into Zynga’s portfolio,” Zynga chief executive officer Frank Gibeau said in a statement. “Small Giant has created an innovative game that delivers a unique player experience that engages over the long term.”
The deal is expected to close on January 1. Zynga will purchase the remaining 20 percent of Small Giant over the next three years “at valuations based on specified profitability goals.”
Helsinki-based Small Giant Games had raised $52 million in equity funding from EQT Ventures, Creandum, Spintop Ventures, Profounders and others since it was founded in 2013. The company reported $33 million of revenue for Empires & Puzzles, its most popular game, 10 months after its launch in 2017. Small Giant, which is also behind Alliance Wars and Season 2: Atlantis, says they exceeded 2017’s revenue just four months into 2018.
“Our studio was founded on the idea that small, skillful teams can accomplish giant things, and I am confident that partnering with Zynga is the right next step in our evolution,” Small Giant CEO Timo Soininen said in a statement. “We will now operate as a separate studio within Zynga, maintaining our identity, culture and creative independence. By leveraging the expertise and support from the wider Zynga team, we will amplify the reach of Empires & Puzzles and the new games in our development pipeline.”
Zynga, founded in 2007, is the developer of FarmVille, Zynga
Zynga expects to bring in $243 million in revenue in the fourth quarter of 2018.
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