After the last few weeks of IPOs, you’d be forgiven if you missed Corsair Gaming’s own public offering.
The company is not our usual fare. Here at TechCrunch, we care a lot of about startups, usually technology startups, which often collect capital from private sources on their way to either the bin, an IPO, or a buyout.
Corsair is some of those things. It is a private company that builds technology products and it has raised some money while private. But from there it’s a slim list. The company was founded in 1994, making it more a mature business than a startup. And it sold a majority of itself to a private equity group in 2017, valued at $525 million at the time.
Fair enough. But flipping through the company’s S-1 filings this morning over coffee, I was impressed all the same and want to walk you through a few of the company’s numbers.
If you care about the impending public debuts of Asana (more here) and Palantir (more here) that we expect next week, Corsair will not provide much directional guidance. But its IPO will be a fascinating debut all the same.
Corsair has managed to stay in the gaming hardware world since I was in short pants, and, even better, has managed to turn the streaming boom into material profit. Its S-1 is an interesting document to read. So let’s get into it, because Corsair Gaming is expected to price later today and trade tomorrow morning.
A gaming giant
As with any private-equity-backed IPO, the company’s SEC filings are a mess of predecessor and successor companies, along with long sections that, once you boil them down, ensure that the private equity firm will retain control.
But once you parse the firm’s numbers, here’s the gist from the first six months of 2020:
Microsoft this morning announced plans to acquire ZeniMax Media Inc. for $7.5 billion in cash. The gaming holding company is the parent to a number of high profile publishers, including Bethesda Game Studios, id Software, ZeniMax Online Studios, Arkane, MachineGames, Tango Gameworks, Alpha Dog and Roundhouse Studios.
Once approved, the deal would bring some of the industry’s highest profile titles under the Microsoft banner, including Elder Scrolls, Doom, Fallout, Qyuake, Wolfenstein, Dishonored, Prey and Starfield.
“All of their great work will of course continue and grow and we look forward to empowering them with the resources and support of Microsoft to scale their creative visions to more players in new ways for you,” Xbox head Phil Spencer said in a blog post announcing the news.
Bethesda SVP Pete Hines addressed the acquisition on the publisher’s own blog, writing, “The world, our industry, and our company has changed a lot in the 34 years since Bethesda Softworks was first founded. Today, it changed again. And I know that brings up questions. But the key point is we’re still Bethesda. We’re still working on the same games we were yesterday, made by the same studios we’ve worked with for years, and those games will be published by us.”
With both a new a Xbox and Playstation due on in the coming months, the closing of such a deal could put Microsoft in a key position in terms of title exclusivity. The parties have yet to discuss how such a move will ultimately impact how big franchises like Elder Scrolls and Doom will be approached on competing systems.
In his own post, Bethesda Executive Producer Todd Howard suggests that such a deal will actually increase the publisher’s ability to make titles more accessible, “Like our original partnership, this one is about more than one system or one screen. We share a deep belief in the fundamental power of games, in their ability to connect, empower, and bring joy. And a belief we should bring that to everyone – regardless of who you are, where you live, or what you play on. Regardless of the screen size, the controller, or your ability to even use one.”
The move will expand Microsoft’s portfolio from 15 to 23 studio teams. It will also bring Bethesda’s titles to Xbox Game Pass — that’s a big win for the cloud gaming service that is currently being positioned as a major piece of Microsoft’s gaming future. Bethesda titles like the upcoming Starfield will be available as part of Game Pass on day of launch. Microsoft also noted this morning that the service has hit 15 million subscribers — that’s up from the 10 million it reported back in April.
In 2014, Zenimax sued Facebook, following Id Software cofounder John Carmack’s move to Oculus. The suit sought $4 billion in damages, alleging stolen trade secrets. A court found in Zenimax’s favor over copyright infringement and breach of contract, but not trade secrets. The parties settled out of court.
Playco is a new mobile gaming startup created by Game Closure co-founder Michael Carter and Zynga co-founder Justin Waldron, as well as game producers Takeshi Otsuka and Teddy Cross.
Although the Tokyo-headquartered company is only announcing its existence today, it’s already a unicorn — it says it’s raised $100 million in Series A funding, at a valuation “just north of $1 billion.”
The round was led by Josh Buckley and Sequoia Capital, with participation from Sozo Ventures, Raymond Tonsing’s Caffeinated Capital, Keisuke Honda’s KSK Angel Fund, Taizo Son’s Mistletoe Singapore, Digital Garage, Will Smith’s Dreamers, Makers Fund and others.
Carter (Playco’s CEO) said the startup will be revealing its first games later this year. For now, he wants to talk about Playco’s vision: It’s trying to address the fact that “it’s very difficult to get two people into a single game in the App Store.” After all, downloading an app is a pretty big hurdle, especially compared to the early days of web and social gaming, when all you needed was a link.
“We’re going to bring that back,” Carter said — with Playco’s titles, sharing and playing a mobile game with your friend should be as simple as texting or calling them. “All it really takes is a hyperlink.”
He pointed to a number of technologies that can enable this “instant play” experience on mobile, including cloud gaming, HTML5 and platform-specific tools like Apple’s new App Clips. He claimed the team is “very good at this cutting edge technology” — and the company has created its own game engine — but he said technology is not the sole focus: “That’s just table stakes.”
Waldron (Playco’s president) argued that this represents the next big platform shift in gaming, and it will require “reinventing a lot of the most popular genres today” while also creating entirely new genres, in the same way that social gaming enabled new types of games.
“If you think about FarmVille, there were no farm games being advertised being in local console games store,” Waldron said. “They don’t market well; if you put up a poster for a farm game, no one wants to play.” But if your friends invite you by sending you some digital crops, then you absolutely want to play.
Carter added that enabling instant play also means that the games themselves have to be fairly straightforward, at least at first glance.
“Ultimately, as we build up the portfolio, we think about what makes the game accessible to anyone on the planet, any ethnicity, any language,” he said. “And the answer is: It has to be broadly appealing. That doesn’t mean we can’t build into it relatively interesting and deep features, but the initial impression has to be the right sort of experience that people can easily relate to.”
Carter also acknowledged that it’s unusual for a startup to raise so much money in its Series A (“It’s not your typical company, and it’s not your typical Series A”), but he said that being more ambitious with fundraising allowed Playco to quickly grow the team to 75 people.
“Bringing talented people together is the most important thing, and [thanks to the funding,] we haven’t had to make any really hard decisions,” he said.
As for how its games will make money, Waldron suggested that Playco will borrow from (but also potentially evolve) many of the existing business models in gaming.
“We don’t need to reinvent the wheel,” he said. “There’s going to be amazing things we can learn from my last company — we ended up inventing a lot of the ways these games are monetizing today … But these new technologies available today create new opportunities. The world has changed a lot since then, and I don’t think everything has caught up.”
Mobile games maker Supercell has been one of the great, understated, breakthroughs of the European startup world. The Helsinki-based mobile games maker built an empire out of Clash of Clans, raking in tons of money and catching the eye of world class investors and eventually a new strategic majority shareholder in the form of Tencent at a $10.2 billion valuation.
That was in 2016. So how does a hot startup keep its edge?
As part of this year’s virtual Disrupt,we sat down to talk with the company’s founder and CEO, Ilkka Paananen, about that and the other challenges and opportunities facing the company, and asked for his tips and opinion on spinning up and running startups in Europe today.
Times are definitely not easy right now: all of us are living through a global health pandemic, and economies as a result of that are teetering; and there is an interesting sea change happening as gaming companies (along with other content makers) face off against big tech, where question of whether platforms or the games themselves have the upper hand. (The most visible and recent example of that: the counter-lawsuits between Epic and Apple over in-app payments.)
For Supercell specifically, its majority owner, Tencent, is in hot water in the US (a major market for Supercell); and it’s sitting on a still-popular but now-ageing game franchise that you could argue is in the middle of its own Battle Royale against the many other big games that are vying for people’s attention (and spending power to keep playing and levelling up). In short, the company itself, now 10 years old, may itself be facing more existential questions of, who are we now, and what comes next?
As you’ll see in the video below, Paananen is very sanguine and calm, which is to say quite Finnish, about a lot of this.
Even without the experience thus far of Supercell under his belt, he has been in the industry for years. Supercell is his second big hit company: before that he founded Sumea, which was acquired by Digital Chocolate, where he became president in the now-defunct bigger studio’s heyday. And, he has been and is an investor, too: most recently Paananen backed Zwift, the gamefied home fitness startup, in its most recent, $450 million round, which included him joining the company’s board. All of this is to say that he can see the bigger picture.
The Tencent issues in the US, he said, are something that the company is watching. But not only are they unresolved — indeed just this week, ahead of any proposed bans on Tencent properties and WeChat in particular, the US government issued more clarification on how people are liable for using WeChat. In any case, Paananen said in the interview that he believes that Supercell doesn’t fall under the US executive order to be shut down, since Tencent is only a shareholder, not a full owner. He’s still waiting to see how it all plays out.
“Our current understanding [is that] it’s about WeChat not Tencent as a whole,” he said, “and that it doesn’t apply to Tencent-invested companies like Supercell.” (Also: one of the good things to have come out of not getting fully acquired, it seems.)
Similarly, Paananen is not overly concerned about the fact that its big hit, while still one of the highest grossing apps globally, is getting on and slowly bringing in less revenues.
Judging by the fact that Supercell has yet to follow up with another successful franchise, and has killed quite a few attempts in the meantime, the process to produce a hit, in fact, still seems to be as elusive to a company that has produced a hit already as it is to those that have not.
“It would be nice to be always on this kind of a growth curve, but the reality is… it’s very much about hits or misses,” he said.
“Sometimes figures go up, and sometimes they go down [so] what’s your time horizon? We never ever think about the next quarter, and very, very rarely think about it and maybe next year, I think that’s a target in itself, you know. We try to think in decades. Our dream is to build a game so as many people as possible will play for a very long time. We are inspired by companies like, say, Nintendo. And if you’re going to take that… then that changes your perspective.”
The company has been building out its options, though, making about three investments a year in other gaming startups, and some full acquisitions of studios, to diversify the team and bring in more options for new games in the future. Later in the Q&A with viewers, Paananen said Supercell has no plans yet for anything in AR or VR, with a firm belief that mobile, and the mechanics of a touch screen, are the best for what it’s building.
It seems that most valuable lesson Paananen has learned, it turns out, is the thing that continues to be his top priority: building the right team for the long haul.
Making sure you have a group that can work together, inspire each other and be productive has been the constant, one that perhaps means even more as the company grows bigger and we continue to work under very decentralised circumstances.
“We are currently on the look-out for people from all around the world to join Supercell to build the be the best teams and then of course the best games,” he said.
Hear about all this, plus Paananen’s opinion on raising money and more, below.
Millions of high school kids play online multiplayer games, but they seldom have crosstown rivals in Fortnite or Valorant. PlayVS wants to make that happen with its platform for school-sponsored esports, and it’s growing like crazy, doubling its staff in the last year and putting thousands of schools on its platform.
PlayVS connects online games with official school administration and branding, elevating esports from hobby to school-sponsored activity.
“I think we’re building the biggest company in gaming,” founder and CEO Delane Parnell said in an interview at Disrupt 2020 this week. With around 20,000 high schools signed up currently and nearly a hundred million dollars in the bank to grow with, it’s not a totally unrealistic statement.
The company collects $64 per player per semi-yearly season, which starts to add up real quick when you have Counter-Strike teams of a dozen people with alternates, or competing League teams at the same school — multiplied by 20,000, of course. A bit of napkin math suggests income from existing customers is easily in the tens of millions.
Parnell offered the following metaphor to explain what the company aspired to.
“Imagine if there was one basketball court, and every kid who ever wanted to play basketball, whether it’s on behalf of their school, or pick up, or some sort of tournament, that’s the court that they had to play on,” he said. “That’s what we’re building.”
Sure, it sounds a little bit like a monopoly on hoops, but the problem right now is that there really isn’t a shared court at all. Esports is wildly disorganized at that level, if it’s organized at all (and let’s be honest, even at the pro level it’s a bit of a jumble). PlayVS wants to provide the connective tissue so that there’s one place that both players and administrators go to when it comes to inter-school competitive gaming.
Parnell explained that the last year has been about learning the ropes and establishing a presence in the also quite confusing world of state school systems.
“We certainly built the base of the business on the partnership with the NFHS — essentially the NCAA of high schools, they govern and write the rules for our high school sports,” he said. But then individual relationships need to be established with districts, financial programs, state leaders, and of course the game publishers themselves, which are understandably eager to connect with the younger generation of gamers.
So far schools in 23 states have signed up, and Parnell said they’re on track to get every state in the union on board by 2022.
“Those are partnerships that take a little time to form. It also takes additional time to build the technology that actually enables online esports, which most people think exists today, but it actually doesn’t,” he said. “So we’ve started to invest very deeply into hiring a team to build our product. We have a ton of capital in the bank and we intend to use that very wisely.”
The product build-out is more than buying servers — it’s attempting to create parity with the tools available in the context of sports like football and basketball.
“There’s products and services that we can bake in, things like recruiting, scouting, proven technology, highlights… these are things that would normally exist from independent companies within traditional sports,” he said. “One company does one thing, a thousand companies do ancillary things that make the sports experience better for every stakeholder, a parent, a coach, a player, etc. We’re going to be able to do all of those things within the PlayVS ecosystem, because we’re the league operator and the sole holder of that data. We will effectively have complete control of what that experience looks like and all of the revenue models associated with that.”
For comparison he suggested fantasy sports, now a huge industry but not one dominated by a single entity. “If there was one group, like CBS for example, that could have aggregated all that behavior, that’d be a $40-50 billion a year company. But they couldn’t get in with, you know, the NFL, the NBA, to give them exclusive rights to be the only fantasy provider on the market,” Parnell explained. “Game publishers are willing to do that with us, they’re willing to integrate with our product because they know we can execute. So I think that’s a big opportunity. And one could be worth hundreds of billions of dollars.”
PlayVS won’t be expanding into pro leagues, he confirmed, saying that the high school and college level work is as much as they can handle right now. But they’re overwhelmed in the best way.
“It’s almost as if the NBA existed for four years, and then they went back and said hey, we need to build high school basketball, college basketball, etc,” he said. “Obviously there’s a lot of catching up to do.”
If in-person events were still a thing in 2020, there’s a pretty good chance we’d know a lot more about the PlayStation 5 by now. With tech companies setting their own event schedules, however, Sony and Microsoft have offered themselves a more leisurely schedule with which to portion out news. Microsoft struck first, with aggressive pricing, two different launch models and a financing plan.
Now it’s Sony’s time to shine. Today’s big event answered some of the lingering questions about the next generation console. The company waited until the bitter end for the most important details. The PS5 will arrive in select markets on November 12 for $500, while the Digital Edition (sans-optical drive) runs $400.
As ever, the event leaned very heavily toward trailers and gameplay demos, showcasing the titles the PS5 will have on offer. Thing kicked off with some major franchise blockbusters including Final Fantasy XVI and the best look yet at Spider-Man: Miles Morales, which featured an extremely compelling bridge battle.
The Spider-Man expansion is due this holiday, to coincide with the console’s launch. Ditto for Call of Duty: Black Ops Cold War, which got a brand new trailer, including some RC car action.
The long-rumored Harry Potter RPG finally got a name and official trailer. Hogwarts Legacy looks like an an epic time in the Wizarding World. That’s due out at some point in 2021.
What’s this? A non-franchise game? Yes, it’s Bethesda’s Deathloop. The tine looping adventure game is due out in mid-2021. The sufficiently creepy trailer for zombie favorite Resident Evil: Village answered more questions than it answered. The title is also slated for next year.
Other titles include Devil May Cry 5 Special Edition (due at launch), Oddworld: Soulstorm and the Demon Souls remaster. Also a little time for Fornite, which is set to be available for the console at launch.
One of the biggest complaints around VR is the same issue that’s plagued generations of gaming platforms: content. A console is only as good as its games, as the saying goes. Today at Facebook Connect, however, Oculus just added two of gaming’s biggest franchises to its slate of upcoming titles.
Ubisoft marked the event by announcing that it will be bringing Assassin’s Creed and Splinter Cell games to VR. The key details are still extremely thin at the moment, but the gaming giant calls them both “new, made-for-VR,” implying that they’ll be more than just ports of existing games.
Production for both is being spearheaded by Ubisoft’s Red Storm subsidiary. The developer has been working on Tom Clancy titles since the late-90s. It’s also behind a handful of VR titles, including 2017’s Star Trek: Bridge Crew.
More details — including timing — will be available closer to launch. Whenever that is.
There are some changes at the helm of Blade, the French startup behind Shadow. Mike Fischer is going to work for the company and become Chief Executive Officer. Jean-Baptiste Kempf is joining the company as Chief Technology Officer.
Shadow is a cloud computing service for gamers. For a monthly subscription fee, you can access a gaming PC in a data center near you. Compared to other cloud gaming services, such as GeForce Now or Google’s Stadia, Shadow provides a full Windows 10 instance. You can install anything you want — Steam, Photoshop or Word.
The company has been growing rapidly over the past few years and raised more than $100 million in total. Last year, the company announced ambitious plans with a wide-ranging partnership with OVHcloud and high-end configurations.
At the same time, co-founder Emmanuel Freund stepped aside as CEO with Jérôme Arnaud taking over. There have been multiple delays with the new product offering and the company is no longer working with OVHcloud. Freund left the company in April and, as INpact Hardware reported in July, Arnaud has been on the way out for a couple of months.
All of this leads us to today’s announcement. Mike Fischer, the company’s new CEO, has been quite active in the video game industry. In the past, he has worked at Sega, Bandai Namco, Microsoft and Epic Games. He was the president and CEO of Square Enix between 2010 and 2013.
Jean-Baptiste Kempf is a well-known figure in the open source community. For the past 14 years, he has been the president of VideoLAN, the organization behind popular media player VLC. VideoLAN has also contributed to widely used video encoding technologies. He also founded VideoLabs, a company that works on VLC-related integrations and support.
The company is still working on rolling out the new Ultra and Infinite configurations to European users who pre-ordered. It originally planned to start rolling out new tiers in the U.S. starting this summer but the company now says it expects to launch these new tiers by the end of the year.
For customers in the U.S., there are no pre-orders, there will simply be a button to upgrade in your account when it’s available. LG invested in the company earlier this year and the service will go live in South Korea later this year as well.
Norwegian company Kahoot originally made its name with a platform the lets educators and students create and share game-based online learning lessons, in the process building up a huge public catalogue of gamified lessons created by its community. Today the startup — now valued at over $2 billion — is announcing an acquisition to give a boost to another segment of its business: corporate customers.
Kahoot has acquired Danish startup Actimo, which provides a platform for businesses to train and engage with employees. Kahoot said that the purchase is being made with a combination of cash and shares, and works to to a total enterprise value of between $26 million and $33 million for the smaller company, with the sale expected to be completed in October 2020.
It may sound like a modest sum in a tech market where companies are currently and regularly seeing paper valuations in the hundreds of millions at Series A stage, but it also presents a different kind of trajectory both for founders and their investors.
This is actually a strong exit for Actimo, which had raised less than $500,000, according to data from PitchBook. And it puts Actimo under the wing of a company that has been scaling globally fast, finding — like others in the areas of online education and remote working — that the current state of social distancing due to Covid-19 is resulting in a boost to its business.
To give you an idea of the scale and growth of Kahoot, the company says that currently it has over 1 billion active users, on top of some 4.4 billion users in aggregate since first launching the platform in 2013. In the last 12 months, some 200 games have been played on its platform. In June, when Kahoot announced that it had raised $28 million in funding, it told us that 100 million games had been played.
In light of its growth and the future opportunity — even putting aside the progression of the coronavirus, it looks like remote work and remote learning will at the least become a lot more common as a longer-term option — the company has also seen a rise in its valuation. With some of its shares traded on the Merkur Market in Norway, the company currently has a market cap of 18.716 billion Norwegian Krone, which at today’s rates is about $2.08 billion. That figure was $1.4 billion in June.
Kahoot’s targeting of the corporate sector is not new. The company has been building a business in this space for years. It says that in the last 12 months, it logged 2 million sessions across 20 million participating “players” of its corporate training “games”, with some 97% of the Fortune 500 among those users. Customers include the likes of Facebook (for sales training), Oyo (hospitality training and onboarding) and Qualys (for taking polls during a conference), among others.
Critically, while a lot of Kahoot’s audience is in education, its corporate most of the revenues come in, one reason why it’s keen to grow that segment with more services and users.
The aim with Actimo, Kahoot says, is to build out a product set aimed at helping organisations with company culture — which, with many organisations now going on eight months and counting of entire teams working regularly outside of their physical offices, has grown as a priority.
Keeping a team feeling like a team, and an individual feeling more than a transactional regard for an employer, is not a simple thing in the best of times. Now, as we continue to work physically away from each other, it will take even more tools and efforts to get the balance right.
In that context, Actimo’s solution is just one aspect, but potentially an interesting one: it has built a platform where employees can track the training that they have done or need to do, engage with other co-workers, and provide feedback, and employers can use it to generally track and encourage how employees are engaging across the company and its various efforts. It counts some 200 enterprises, including Circle K, Hi3G, and Compass Group, among its customers, and has current ARR of $5 million.
For comparison, Kahoot, in its Q2 financials published in August, reported ARR of $25 million, with invoiced revenue for the quarter at $9.6 million, growing some 317% on the same quarter a year before. The company has also raised some $110 million in private funding from the likes of Microsoft and Disney.
As Kahoot looks to find more than just a transient place in a company’s IT and software fabric — transience of attention always being a risk with anything gaming-based — it makes a lot of sense to pick up Actimo and work on ways of coupling the platform with its other corporate work. You can also imagine a time when it might create a similar kind of dashboard for the educational sector.
“We are excited to welcome the Actimo team to be part of the fast-growing Kahoot! family,” said Kahoot! CEO, Eilert Hanoa, in a statement. “This acquisition will further extend Kahoot!’s corporate learning offerings, by providing solutions tailored for the frontline segment, as well as to solidify company culture and engagement among remote and distributed teams in companies of all types and sizes. This continues our expressed ambition to also grow through M&A by adding strategic capabilities that we can leverage across our global platform.”
“We are thrilled to join forces with Kahoot! in our mission to develop next-level solutions that connect remote employees and boost employee engagement and productivity,” said Eske Gunge, CEO at Actimo, in a statement. “Being part of Kahoot! and with our experience from working with innovative and ambitious enterprises across industries, we can together set a new standard for corporate learning and engagement.”
Zwift, a 350-person, Long Beach, Calif.-based online fitness platform that immerses cyclists and runners in 3D generated worlds, just raised a hefty $450 million in funding led by the investment firm KKR in exchange for a minority stake in its business.
Permira and Specialized Bicycle’s venture capital fund, Zone 5 Ventures, also joined the round alongside earlier backers True, Highland Europe, Novator and Causeway Media.
Zwift has now raised $620 million altogether and is valued at north of $1 billion.
Why such a big round? Right now, the company just makes an app, albeit a popular one.
Since its 2015 founding, 2.5 million people have signed up to enter a world that, as Outside magazine once described it, is “part social-media platform, part personal trainer, part computer game.” That particular combination makes Zwift’s app appealing to both recreational riders and pros looking to train no matter the conditions outside.
The company declined to share its active subscriber numbers with us — Zwift charges $15 per month for its service — but it seemingly has a loyal base of users. For example, 117,000 of them competed in a virtual version of the Tour de France that Zwift hosted in July after it was chosen by the official race organizer of the real tour as its partner on the event.
Which leads us back to this giant round and what it will be used for. Today, in order to use the app, Zwift’s biking adherents need to buy their own smart trainers, which can cost anywhere from $300 to $700 and are made by brands like Elite and Wahoo. Meanwhile, runners use Zwift’s app with their own treadmills.
Now, Zwift is jumping headfirst into the hardware business itself. Though a spokesman for the company said it can’t discuss any particulars — “It takes time to develop hardware properly, and COVID has placed increased pressure on production” — it is hoping to bring its first product to market “as soon as possible.”
He added that the hardware will make Zwift a “more immersive and seamless experience for users.”
Either way, the direction isn’t a surprising one for the company, and we don’t say that merely because Specialized participated in this round as a strategic backer. Cofounder and CEO Eric Min has told us in the past that the company hoped to produce its own trainers some day.
Given the runaway success of the in-home fitness company Peloton, it wouldn’t be surprising to see a treadmill follow, or even a different product entirely. Said the Zwift spokesman, “In the future, it’s possible that we could bring in other disciplines or a more gamified experience.” (It will have expert advice in this area if it does, given that Swift just brought aboard Ilkka Paananen, the co-founder and CEO of Finnish gaming company Supercell, as an investor and board member.)
In the meantime, the company tells us not to expect the kind of classes that have proven so successful for Peloton, tempting as it may be to draw parallels.
While Zwift prides itself on users’ ability to organize group rides and runs and workouts, classes, says its spokesman, are “not in the offing.”
If you listed the trends that have captured the attention of 20 Warsaw-focused investors who replied to our recent surveys, automation/AI, enterprise SaaS, cleantech, health, remote work and the sharing economy would top the list. These VCs said they are seeking opportunities in the “digital twin” space, proptech and expanded blockchain tokenization inside industries.
Investors in Central and Eastern Europe are generally looking for the same things as VCs based elsewhere: startups that have a unique value proposition, capital efficiency, motivated teams, post-revenue and a well-defined market niche.
Out of the cohort we interviewed, several told us that COVID-19 had not yet substantially transformed how they do business. As Michał Papuga, a partner at Flashpoint VC put it, “the situation since March hasn’t changed a lot, but we went from extreme panic to extreme bullishness. Neither of these is good and I would recommend to stick to the long-term goals and not to be pressured.”
Said Pawel Lipkowski of RBL_VC, “Warsaw is at its pivotal point — think Berlin in the ‘90s. It’s a place to observe carefully.”
What trends are you most excited about investing in, generally?
Gradual shift of enterprises toward increased use of automation and AI, that enables dramatic improvement of efficiency, cost reduction and transfer of enterprise resources from tedious, repeatable and mundane tasks to more exciting, value added opportunities.
What’s your latest, most exciting investment?
One of the most exciting opportunities is ICEYE. The company is a leader and first mover in synthetic-aperture radar (SAR) technology for microsatellites. It is building and operating its own commercial constellation of SAR microsatellites capable of providing satellite imagery regardless of the cloud cover, weather conditions and time of the day and night (comparable resolution to traditional SAR satellites with 100x lower cost factor), which is disrupting the multibillion dollar satellite imagery market.
Are there startups that you wish you would see in the industry but don’t? What are some overlooked opportunities right now?
I would love to see more startups in the digital twin space; technology that enables creation of an exact digital replica/copy of something in physical space — a product, process or even the whole ecosystem. This kind of solution enables experiments and [the implementation of] changes that otherwise could be extremely costly or risky – it can provide immense value added for customers.
What are you looking for in your next investment, in general?
A company with unique value proposition to its customers, deep tech component that provides competitive edge over other players in the market and a founder with global vision and focus on execution of that vision.
Which areas are either oversaturated or would be too hard to compete in at this point for a new startup? What other types of products/services are you wary or concerned about?
No market/sector is too saturated and has no room for innovation. Some markets seem to be more challenging than others due to immense competitive landscape (e.g., food delivery, language-learning apps) but still can be the subject of disruption due to a unique value proposition of a new entrant.
How much are you focused on investing in your local ecosystem versus other startup hubs (or everywhere) in general? More than 50%? Less?
OTB is focused on opportunities with links to Central Eastern European talent (with no bias toward any hub in the region), meaning companies that leverage local engineering/entrepreneurial talent in order to build world-class products to compete globally (usually HQ outside CEE).
Which industries in your city and region seem well-positioned to thrive, or not, long term? What are companies you are excited about (your portfolio or not), which founders?
CEE region is recognized for its sizable and highly skilled talent pool in the fields of engineering and software development. The region is well-positioned to build up solutions that leverage deep, unique tech regardless of vertical (especially B2B). Historically, the region was especially strong in AI/ML, voice/speech/NLP technologies, cybersecurity, data analytics, etc.
How should investors in other cities think about the overall investment climate and opportunities in your city?
CEE (including Poland and Warsaw) has always been recognized as an exceptionally strong region in terms of engineering/IT talent. Inherent risk aversion of entrepreneurs has driven, for a number of years, a more “copycat”/local market approach, while holding back more ambitious, deep tech opportunities. In recent years we are witnessing a paradigm shift with a new generation of entrepreneurs tackling problems with unique, deep tech solutions, putting emphasis on global expansion, neglecting shallow local markets. As such, the quality of deals has been steadily growing and currently reflects top quality on global scale, especially on tech level. CEE market demonstrates also a growing number of startups (in total), which is mostly driven by an abundance of early-stage capital and success stories in the region (e.g., DataRobot, Bolt, UiPath) that are successfully evangelizing entrepreneurship among corporates/engineers.
Do you expect to see a surge in more founders coming from geographies outside major cities in the years to come, with startup hubs losing people due to the pandemic and lingering concerns, plus the attraction of remote work?
I believe that local hubs will hold their dominant position in the ecosystem. The remote/digital workforce will grow in numbers but proximity to capital, human resources and markets still will remain the prevalent force in shaping local startup communities.
Which industry segments that you invest in look weaker or more exposed to potential shifts in consumer and business behavior because of COVID-19? What are the opportunities startups may be able to tap into during these unprecedented times?
OTB invests in general in companies with clearly defined technological advantage, making quantifiable and near-term difference to their customers (usually in the B2B sector), which is a value-add regardless of the market cycle. The economic downturn works generally in favor of technological solutions enabling enterprise clients to increase efficiency, cut costs, bring optimization and replace manual labour with automation — and the vast majority of OTB portfolio fits that description. As such, the majority of the OTB portfolio has not been heavily impacted by the COVID pandemic.
How has COVID-19 impacted your investment strategy? What are the biggest worries of the founders in your portfolio? What is your advice to startups in your portfolio right now?
The COVID pandemic has not impacted our investment strategy in any way. OTB still pursues unique tech opportunities that can provide its customers with immediate value added. This kind of approach provides a relatively high level of resilience against economic downturns (obviously, sales cycles are extending but in general sales pipeline/prospects/retention remains intact). Liquidity in portfolio is always the number one concern in uncertain, challenging times. Lean approach needs to be reintroduced, companies need to preserve cash and keep optimizing — that’s the only way to get through the crisis.
Are you seeing “green shoots” regarding revenue growth, retention or other momentum in your portfolio as they adapt to the pandemic?
A good example in our portfolio is Segron, a provider of an automated testing platform for applications, databases and enterprise network infrastructure. Software development, deployment and maintenance in enterprise IT ecosystem requires continuous and rigorous testing protocols and as such a lot of manual heavy lifting with highly skilled engineering talent being involved (which can be used in a more productive way elsewhere). The COVID pandemic has kept engineers home (with no ability for remote testing) while driving demand for digital services (and as such demand for a reliable IT ecosystem). The Segron automated framework enables full automation of enterprise testing leading to increased efficiency, cutting operating costs and giving enterprise customers peace of mind and a good night’s sleep regarding their IT infrastructure in the challenging economic environment.
What is a moment that has given you hope in the last month or so? This can be professional, personal or a mix of the two.
I remain impressed by the unshakeable determination of multiple founders and their teams to overcome all the challenges of the unfavorable economic ecosystem.
Welcome to Tuesday of TechCrunch Disrupt week. In a few hours, I’m hosting a panel about how startups can reach $100 million in annual recurring revenue (ARR) with the CEOs of Egnyte, GitLab and the President of Kaltura. It’s going to be a jam. Bring your questions!
Right now, however, let’s talk about some bigger companies, namely all the unicorns that are going public this week. We can set aside Corsair Gaming, Palantir and Asana, as they debut next week. This morning let’s get settled on what’s ahead for JFrog, Snowflake, Sumo Logic and Unity.
We explored the most recent pricing ranges for Snowflake and JFrog yesterday, helping set the stage. With both companies setting new, richer price targets for their debuts, the technology market looks hot. That’s good news for Sumo Logic and Unity, which should also begin trading this week.
Read on for your cheat sheet on all things upcoming from the realm of IPOs, and, in response to Twitter kerfuffle, notes on why Snowflake is seeing such investor demand despite a history of losses. It’s a good day to remind ourselves why some losses are very bad and others are pretty OK, given a certain set of circumstances.
Big-ass IPO week
After trading today we expect to see JFrog and Snowflake price their IPOs. As a quick reminder, this is what the two companies are expecting, starting with developer-focused service provider JFrog:
In 2008, James “Clayster” Eubanks, then 16, decided he had what it took to be the number one Call of Duty player in the world. Growing up in Virginia, Eubanks owned all the latest consoles and specced-out gaming PCs; his house was the first on the block to have DSL. Now, he put all that practice to use, grinding up the Call of Duty ranks every single day, balancing his competitive ambitions against school, part-time jobs, girls. Playing the game professionally wasn’t an established career path yet, but there eventually came to be a loose circuit of tournaments. “It was really hectic,” Eubanks says. “But it became more and more sophisticated as the years have gone on.” Every year, tournament prizes got a little bigger. The competition got harder. He got more famous.
Then, the esports industry ballooned, as the massive popularity of League of Legends and Starcraft II esports kicked off a wave of big-money sponsorships and international stadium events. Publisher Activision began looking at competitive Call of Duty through a new lens. In 2020, Activision launched the Call of Duty League: 12 teams with five players each, representing 12 different cities around the world. As a top competitor playing on the Dallas Empire, Eubanks helped his team take the first Call of Duty League championship in July. He was thrilled. Then everything changed.
In August, Activision decided that professional Call of Duty games should be four-versus-four, not five-versus-five. Twenty percent of the league’s players had to go. Days after his big victory, the Dallas Empire dropped Eubanks, who had been designated fifth on the roster. “Got about 24 hours of happiness before I got thrown back into the blender, but that’s the story of my career,” Eubanks wrote on Twitter.
Eric Peckham is the creator of the Monetizing Media newsletter and podcast. He was previously TechCrunch’s media columnist.
In the first part of my outline on the company, I explained the scope of Unity’s multidimensional business, its R&D efforts and competitive positioning, and its grand vision for interactive 3D content across every industry.
In the conclusion, I’ll dig into Unity’s financials and how it is marketing its public listing before turning to discuss the bear and bull cases for its future.
Key data points from Unity’s S-1 filing
Revenue grew 42% year-over-year from $381 million in 2018 to $542 million in 2019 with operating losses of $130 million and $150 million respectively. It hit $351 million in revenue by June 30 this year. That pace suggests a 2020 total around $700-$750 million (+30% year-over-year).
The company has gross margins of about 79%, although costs are overwhelmingly centered in R&D and sales and marketing, which account for 47% and 32% of revenue, respectively.
The company has cumulatively lost $569 million up to this point, including a $163 million net loss in 2019.
The geographical source of Unity’s revenue in 2019 was:
21% APAC — excluding China
5% Americas — excluding U.S.
Unlike many other Western tech companies, Unity operates freely in China.
In Part 1, I explained each of Unity’s seven main revenue streams. During the first half of 2020, revenue by segment broke down to:
$216.9 million (62%) from Operate Solutions (products for managing and monetizing content), the “substantial majority” of which is from the ads business.
$101.8 million (29%) from Create Solutions (products and consulting for content creation), two-thirds of which is from Unity Pro subscriptions.
$32.7 million (9%) from Strategic Partnerships and Other (Unity Asset Store and Verified Solutions Partners).
The S-1 discloses that less than 10% of overall revenue is from “newer products and services, such as Vivox and deltaDNA” (referencing key 2019 acquisitions for its Operate segment).
Eric Peckham is the creator of the Monetizing Media newsletter and podcast. He was previously TechCrunch’s media columnist.
Last week, Unity Software Inc. filed to go public on the New York Stock Exchange, but the 16-year-old tech company is universally known within the gaming industry and largely unknown outside of it.
Unity has expanded beyond gaming, pouring hundreds of millions of dollars into a massive bet to become an underlying platform for humanity’s future in a world where interactive 3D media stretches from our entertainment experiences and consumer applications to office and manufacturing workflows.
Much of the reporting about Unity’s S-1 has mischaracterized the business. Unity is easily misunderstood because:
Most people who aren’t game developers don’t understand what a game engine does.
It has numerous revenue streams.
There’s only a partial business overlap between Unity and Epic Games, its closest competitor.
Last year, I wrote an in-depth guide to Unity’s founding and rise in popularity, interviewing more than 20 top executives in San Francisco and Copenhagen, plus many other professionals in the industry. In this two-part guide to get up to speed on the company, I’ll explain Unity’s business, where it is positioned in the market, what its R&D is focused on and how game engines are eating the world as they gain adoption across other industries.
In part two, I’ll analyze Unity’s financials, explain how the company has positioned itself in the S-1 to earn a higher valuation and outline both the bear and bull cases for its future.
For those in the gaming industry who are familiar with Unity, the S-1 might surprise you in a few regards. The Asset Store is a much smaller business that you might think, Unity is more of an enterprise software company than a self-service platform for indie devs and advertising solutions appear to make up the largest segment of Unity’s revenue.
Unity’s origin and core business is as a game engine, software that is similar to Adobe Photoshop, but used instead for editing games and creating interactive 3D content. Users import digital assets (often from Autodesk’s Maya) and add logic to guide each asset’s behavior, character interactions, physics, lighting and countless other factors that create fully interactive games. Creators then export the final product to one or more of the 20 platforms Unity supports, such as Apple iOS and Google Android, Xbox and Playstation, Oculus Quest and Microsoft HoloLens, etc.
In this regard, Unity is more comparable to Adobe and Autodesk — which both have integrations with Unity — than to game studios or publishers like Electronic Arts and Zynga.
What are Unity’s lines of business?
Since John Riccitiello took over as CEO from co-founder David Helgason in 2014, Unity has expanded beyond its game engine and has organized activities into two divisions: Create Solutions (i.e., tools for content creation) and Operate Solutions (i.e., tools for managing and monetizing content). There are seven noteworthy revenue streams overall:
Create Solutions (29% of H1 2020 revenue)
The Unity platform: The core game engine, which operates on a freemium subscription model. Individuals, small teams and students use it for free, whereas more established game studios and enterprises in other industries pay (via the Unity Plus, Unity Pro and Unity Enterprise premium tiers).
Engine extensions/add-ons: A growing portfolio of tools and extensions of the core engine purpose-built for specific industries and use cases. These include MARS for VR development, Reflect for architecture and construction use with BIM assets, Pixyz for importing CAD data, Cinemachine for virtual production of films and ArtEngine for automated art creation.
Professional services: Hands-on, specialized consulting for enterprise customers using Unity’s engine and other products, beefed up by its $55 million April acquisition of Finger Food Studios (a 200-person team that builds interactive media projects for corporate clients using Unity).
Aside from these three product categories, Unity is reporting another group of content creation offerings separately in the S-1 as “Strategic Partnerships & Other” (which accounts for further 9% of revenue):
Strategic Partnerships: Major tech companies pay Unity via a mix of structures (flat-fee, revenue-share and royalties) for Unity to create and maintain integrations with their software and/or hardware. Since Unity is the most popular platform to build games with, ensuring Unity integrates well with Oculus or with the Play Store is very important to Facebook and Google, respectively.
Unity Asset Store: Unity’s marketplace for artists and developers to buy and sell digital assets like a spooky forest or the physics to guide characters’ joint movements for use in their content so they don’t each have to create every single thing from scratch. It is commonly used, though larger game studios often use Asset Store assets just for initial prototyping of game ideas.
Operate Solutions (62% of H1 2020 revenue)
Advertising: Via the 2014 acquisition of Applifier, Unity launched an in-game advertising network for mobile games. This expanded substantially with the Unified Auction, a simultaneous auction that helps games get the highest bid from among potential advertisers. Unity is now one of the world’s largest mobile ad networks, serving 23 billion ads per month. Unity also has a dynamic monetization tool that makes real-time assessments of whether it is optimal to serve an ad, prompt an in-app purchase or do nothing to maximize each player’s lifetime value. While the Unity IAP feature enables developers to manage in-app purchases (IAP), Unity does not take a cut of IAP revenue at this time.
Live Services: A portfolio of cloud-based solutions for game developers to better manage and optimize their user acquisition, player matchmaking, server hosting and identification of bugs. This portfolio has primarily been assembled through acquisitions like Multiplay (cloud game server hosting and matchmaking), Vivox (cloud-hosted system for voice and text chat between players in games), and deltaDNA (player segmentation for campaigns to improve engagement, monetization and retention). Unity Simulate trains AI models in virtual recreations of the real world (or testing games for bugs). These are structured with usage-based pricing, with an initial amount of usage free.
Unity versus Unreal, versus others
Unity is compared most frequently to Epic Games, the company behind the other leading game engine, Unreal. Below is a quick overview of the products and services that differentiate each company. The cost of switching game engines is meaningful in that developers are typically specialized in one or the other and can take months to gain high proficiency in another, but some teams do vary the engine they use for different projects. Moving an existing game (or other project) over to a new game engine is a major undertaking that requires extensive rebuilding.
Epic has three main businesses: game development/publishing, the Epic Games Store and the Unreal Engine. Epic’s core is in developing its own games and the vast majority of Epic’s estimated $5.6 billion in 2018 revenue came from that (principally, from Fortnite). The Epic Games Store is a consumer-facing marketplace for gamers to purchase and download games; game developers pay Epic a 12.5% cut of their sales. In those two areas of business, Unity and Epic don’t compete. While much of the press about Unity’s IPO frames Epic’s current conflict with Apple as an opportunity for Unity, it is largely irrelevant. A court order blocked Apple from punishing iOS apps made with Unreal. Unity doesn’t have any of its own apps in the App Store and doesn’t have a consumer-facing store for games. It’s already the default choice of game engine for anyone building a game for iOS or Android, and it’s not feasible to switch the engine of an existing game, so Epic’s conflict does not create a new market opening.
Origins: Unreal was Epic’s proprietary engine that was licensed to other PC and console studios and became its own business as a result of its popularity. Unity launched as an engine for indie developers building Mac games (an underserved niche) and expanded to other emerging market segments considered irrelevant by the core gaming industry: small indie studios, mobile developers, and AR and VR games. Unity exploded in global popularity as the main engine for mobile games.
Programming language: Based in the C++ programming language, Unreal requires more extensive programming than Unity (which requires programming in C#) but enables more customization to achieve higher performance.
Core markets: Unreal is much more popular among PC and console game developers; it is oriented toward bigger, high-performance projects by professionals. That said, it is establishing itself firmly in AR and VR and proved with Fortnite it can take a AAA console and PC game cross-platform to mobile. Unity meanwhile dominates in mobile games — now the largest (and fastest-growing) segment of the gaming industry — and has kept the largest market share in AR and VR content.
Ease of authoring: Unity has prioritized ease of use since its early days, with a mission of democratizing game development that was so concentrated among large studios backed by substantial budgets. This is why Unity is the common choice in educational environments and by individuals and small teams creating casual mobile games. Making Unity easier to use, including among nondevelopers remains an R&D focus. Unreal does have a visual scripting tool to conduct some development without needing to code, but it’s far from a no-code solution to developing a high-quality game (no one offers that). Unreal isn’t dramatically more complex but, as a generalization, it requires more work and technical skill.
Pricing: While Unity operates on a freemium subscription model, Unreal operates on a revenue-share, taking 5% of a game’s revenue. Both have separately negotiated pricing for companies outside of gaming that aren’t publicly disclosed.
In-house game development: Aside from its first two years of existence operating out of a Copenhagen apartment, Unity has never focused on creating its own content (aside from short films and demos to highlight new technology). Epic argues that building games informs them to build a better engine that has been more heavily tested for bugs. Unity argues that creating games in-house would put it in competition with customers and that it builds a better engine for the overall market by focusing solely on that and not repurposing an engine built first for a specific use case (e.g., MMOs).
M&A: Like Unity, Epic has made acquisitions to strengthen Unreal’s technical offering to game developers and to industrial customers, like its purchases of Quixel (a library of 3D scanned real-world assets) and Twinmotion (for bringing BIM and CAD assets into an engine).
Many large gaming companies, especially in the PC and console categories, continue to use their own proprietary game engines built in-house. It is a large, ongoing investment to maintain a proprietary engine, which is why a growing number of these companies are switching to Unreal or Unity so they can focus more resources on content creation and tap into the large talent pools that already have mastery in each one.
Other game engines to note are Cocos2D (an open-source framework by Chukong Technologies that has a particular following among mobile developers in China, Japan and South Korea), CryEngine by Crytek (popular for first-person shooters with high visual fidelity) and Amazon’s Lumberyard (which was built off CryEngine and doesn’t seem to have widespread adoption or command much respect among the developers and executives I’ve spoken to).
There are many niche game engines in the market since every studio needs to use one and those who build their own often license it if their games aren’t commercial successes or they see an underserved niche among studios creating similar games. That said, it’s become very tough to compete with the robust offerings of the industry standards — Unity and Unreal — and tough to recruit developers to work with a niche engine.
UGC platforms for creating and playing games like Roblox (or new entrants like Manticore’s Core and Facebook Horizon) don’t compete with Unity — at least for the foreseeable future — because they are dramatically simplified platforms for creating games within a closed ecosystem with much more limited monetization ability. The only game developers they will pull away from Unity are hobbyists on Unity’s free tier.
I’ve written extensively on how UGC-based game platforms are central to the next paradigm of s.ocial media, anchored within gaming-centric virtual worlds. But based on the overall gaming market growth and the diversity of game types, these platforms can continue to soar in popularity without being a competitive threat to the traditional studios who pay Unity for its engine, ad network, or cloud products
What’s at the forefront of Unity’s technical innovation?
In recent years, Unity has been developing its “data-oriented technology stack,” or DOTS, gradually rolling it out in modules across the engine.
Unity’s engine centers on programming in C# code, which is easier to learn and more time-saving than C++ since it is a higher level programming language. Simplification comes with the trade-off of less ability to customize instruction by directly interacting with memory. C++, which is the standard for Unreal, enables that level of customization to achieve better performance but requires writing a lot more code and having more technical skill.
DOTS is an effort to not just resolve that discrepancy, but achieve dramatically faster performance. It makes use of the ability to add annotations to C# code to further customize the code’s instructions and automatically recompiles code written by humans to be optimized for how a computer carries out instructions. The standard programming languages in use by humans are all oriented around how humans think (object-oriented); Unity claims a proprietary breakthrough in understanding how to reorganize object-oriented code into data-oriented code (optimized for how computers think) so that when it is compiled into the lowest level languages that provide 1s-and-0s instructions to the __, it is orders of magnitude faster in processing the request. This level of efficiency should, on one hand, allow highly complex games and simulations with cutting-edge graphics to run quickly on GPU-enabled devices, while, on the other hand, allowing simpler games to be so small in file size they can run within messenger apps on the lowest quality smartphones and even on the screens of smart fridges.
Unity is bringing DOTS to different components of its engine one step at a time and users can opt whether to use DOTS for each component/step of their project. The company’s Megacity demo (below) shows DOTS enabling a sci-fi city with hundreds of thousands of assets rendered in real-time, from the blades spinning on the air conditioners in every apartment building to flying car traffic responding to the player’s movements.
The forefront of graphics technology is in enabling real-time ray tracing (a lighting effect mimicking the real-life behavior of light reflecting off different surfaces) at a fast enough rendering speed so games and other interactive content can be photorealistic (i.e., you can’t tell it’s not the real world). It’s already possible to achieve this in certain contexts but takes substantial __ [processing power?] to render. Its initial use is for content that is not rendered in real-time, like films. Here are two videos from __ by Unity and Unreal, each demonstrating ray tracing that makes a digital version of a BMW look identical to video of a real car.
To support ray tracing and other cutting-edge graphics, Unity released its High Definition Render Pipeline in 2018. It gives developers more powerful graphics rendering for GPU devices to achieve high visual fidelity in console and PC games plus nongaming uses like industrial simulations. By comparison, its Universal Render Pipeline optimizes content for lower-end hardware like mobile phones.
The Unity Labs team is focused on the next generation of authoring tools, particularly in an era of AR or VR headsets being widely adopted. One component of this is the vision for a future where nontechnical people could develop 3D content with Unity solely through hand gestures and voice commands. In 2016, Unity released an early concept video for this project (something I demo-ed at Unity headquarters in SF last year):
Game engines are eating the world
The term “game engine” limits the scope of what these platforms are already used for. They are interactive 3D engines used for practically any type of digital content you can imagine. The core engine is used for virtual production of films to autonomous vehicle training simulations to car configurators on auto websites to interactive renderings of new buildings.
Both Unity and Unreal have long been used outside gaming by people repurposing them and over the last three to five years have made expanding use of their engines in other industries a big priority. They are primarily focused on large- and mid-size companies in (1) architecture, engineering and construction, (2) automotive and heavy manufacturing, and (3) cinematic video.
In film, game engines are used for virtual production. The settings, whether animated or scanned from real-world environments, are set up as virtual environments like those of a video game where virtual characters interact and with human actors captured through sets surrounded by the virtual environments on screens. The director and VFX team can change the surroundings, the time of day, etc. in real-time to find the perfect shot.
Since assets can be imported from CAD, BIM and other formats, and since Unity gives you the ability to build a whole world and simulate changes in real-time (on a screen or in AR/VR), there are a vast scope of commercial uses for it. There are four main use cases for Unity’s engine beyond entertainment experiences:
Design and planning: Have teams work on interactive 3D models of their product simultaneously (in VR, AR or on screens) from offices around the world and attach metadata to every component about its materials, pricing, etc. The Hong Kong International airport used Unity to create a digital twin of the terminals connected to Internet of Things (IoT) data, informing them of passenger flow, maintenance issues and more in real-time.
Training, sales and marketing: Use interactive 3D content so staff or customers can engage with photorealistic renderings of industrial products, VR trainings for risky construction situations, online car configurators that render custom designs in real-time or an architect’s plan for new office space with every asset within the project filled with metadata and responsive to interaction, changes in lighting, etc.
Simulation: Generate training data for machine learning algorithms using virtual recreations of real-world environments (like for autonomous vehicles in San Francisco) and running thousands of instances in each batch. Unity Simulation customers include Google’s DeepMind.
Human machine interfaces (interactive screens): Create interactive displays for in-vehicle infotainment systems and AR heads up displays, as showcased by Unity’s 2018 collaboration with electric car startup Byton.
Unity is currently in a powerful position as the key platform for developing VR/AR content and distributing it across different operating systems and devices. Zuckerberg saw Unity as the natural platform for building “key platform services” in the XR ecosystem like an “avatar/content marketplace and app distribution store” for this next paradigm.
If the company can maintain its position as the leading platform for building mixed-reality applications in the coming era I envision where mixed reality is our main digital tool, Unity’s IPO will help it build a solid foundation.
Unity, the company behind the popular real-time 3D engine, today officially launched its Cloud Content Delivery service. This new service, which is engine-agnostic, combines a content delivery network and backend-as-a-service platform to help developers distribute and update their games. The idea here is to offer Unity developers — and those using other game engines — a live game service option that helps them get the right content to their players at the right time.
As Unity’s Felix The noted, most game developers currently use a standard CDN provider, but that means they must also develop their own last-mile delivery service in order to be able to make their install and update process more dynamic and configurable. Or, as most gamers can attest, the developers simply opt to ship the game as a large binary and with every update, the user has to download that massive file again.
“That can mean the adoption of your new game content or any content will trail a little bit behind because you are reliant on people doing the updates necessary,” The said.
And while the Cloud Delivery Service can be used across platforms, the team is mostly focusing on mobile for now. “We are big fans of focusing on a certain segment when we start and then we can decide how we want to expand. There is a lot of need in the mobile space right now — more so than the rest,” The said. To account for this, the Cloud Content Delivery service allows developers to specify which binary to send to which device, for example.
Having a CDN is one thing, but that last-mile delivery, as The calls it, is where Unity believes it can solve a real pain point for developers.
“CDNs, you get content. Period,” The said. “But in this case, if you want to, as a game developer, test a build — is this QA ready? Is this something that is still being QAed? The build that you want to assign to be downloaded from our Cloud Content Delivery will be different. You want to soft launch new downloadable content for Canada before you release it in the U.S.? You would use our system to configure that. It’s really purpose-built with video games in mind.”
The team decided to keep pricing simple. All developers pay for is the egress pricing, plus a very small fee for storage. There is no regional pricing either, and the first 50GB of bandwidth usage is free, with Unity charging $0.08 per GB for the next 50TB, with additional pricing tiers for those who use more than 50TB ($0.06/GB) and 500TB ($0.03).
“Our intention is that people will look at it and don’t worry about ‘what does this mean? I need a pricing calculator. I need to simulate what’s it going to cost me,’ but really just focus on the fact that they need to make great content,” The explained.
It’s worth highlighting that the delivery service is engine-agnostic. Unity, of course, would like you to use it for games written with the help of the Unity engine, but it’s not a requirement. The argues that this is part of the company’s overall philosophy.
“Our mission has always been centered around democratizing development and making sure that people — regardless of their choices — will have access to success,” he said. “And in terms of operating your game, the decision of a gaming engine typically has been made well before operating your game ever comes into the picture. […] Developer success is at the heart of what we want to focus on.”
Monthly financing isn’t an entirely new concept in the world of Xbox. Microsoft offered a similar plan for the Xbox One S a few years ago. The idea is pretty simple: pay a monthly fee for hardware and software for two years until you outright own the device. What’s new here, however, is that the company is introducing the plan for its brand new consoles due out later this year.
Along with its Series S announcement, Microsoft detailed two new plans designed to get the consoles in the hands of those unwilling or unable to shell out $299 or $499 for a new system up front. It’s a move that greatly expands the accessibility of the system, even beyond the recent announcement of the low-cost model.
The move is in line with a recent rekindled interest in a hardware as a service model. We’ve seen a number of companies like Zoom embrace this to varying degrees. Though really, the rent to own model shares a lot with smartphone contracts — even as those have begun to fall out of favor in the U.S. to some degree in recent years.
Here, $25 a month will get a Series S console, bundled with Game Pass Ultimate. For $35 a month, meanwhile, you get Game Pass Ultimate plus the Series X. There’s nothing to pay up front. Given how central the Game Pass streaming service is to the next-gen console, it’s a pretty solid deal. After all, Game Pass Ultimate will run you $15 a month without hardware access thrown in.
With estimates around PlayStation 5 pricing ranging from around $450-$550, Sony’s got a tough act to follow in terms of aggressive pricing. Even though the PS5 has arguably drummed up considerably more excitement thus far than the next generation Xbox, a $25/month entry point is tough to compete with.
Apple strikes back at Epic Games, Android 11 is here and Microsoft announces a new stripped-down Xbox. This is your Daily Crunch for September 8, 2020.
The big story: Apple files countersuit against Epic
Apple has made the latest move in a legal battle against Epic Games, filing a lawsuit claiming that the company behind Fortnite is in breach of contract.
“Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store,” Apple wrote in its suit.
This follows Epic’s attempt in August to avoid Apple’s 30% App Store fee, which led to Apple removing Fortnite and eventually Epic from the App Store. (Accounts tied to Epic’s Unreal game engine have not been removed.) Epic then launched a lawsuit and a PR campaign against Apple, arguing that the company is abusing its market power.
The tech giants
Android 11 has arrived — Android 11 isn’t a radical departure, but there are a number of interesting new user-facing updates that mostly center around messaging, privacy and giving you better control over all of your smart devices.
Apple has filed a countersuit against Epic over the latter’s attempt to circumvent App Store rules and avoid paying millions in fees. The lawsuit alleges that Epic is deliberately in breach of contract and asks the court to award damages and prohibit Epic from attempting anything like this again.
A brief refresher: Epic in mid August slipped a new way to buy in-game currency for Fortnite that skipped giving Apple its 30 percent cut, while simultaneously launching a PR campaign calling the company a monopoly and the App Store rules unjust. Apple responded by banning Epic’s accounts from the App Store, making it clear that this action could be avoided by Epic simply removing or adjusting the in-game store. Epic sought to have a court reverse its ban as an unfair business practice by a monopoly that would be proved as such, but only succeeded in having accounts unrelated to Fortnite unlocked.
Epic now seeks to show that Apple is a monopoly and its practices should be deemed unlawful, and Apple aims to show that’s untrue — but at the same time, has now filed this suit alleging wrongdoing by Epic.
“Although Epic portrays itself as a modern corporate Robin Hood, in reality it is a multi-billion dollar enterprise that simply wants to pay nothing for the tremendous value it derives from the App Store,” writes Apple in its suit.
“While Epic and its CEO take issue with the terms on which Apple has since 2008 provided the App Store to all developers, this does not provide cover for Epic to breach binding contracts, dupe a long-time business partner, pocket commissions that rightfully belong to Apple, and then ask this Court to take a judicial sledgehammer to one of the 21st Century’s most innovative business platforms simply because it does not maximize Epic’s revenues.”
It would not be productive to go over the case in detail just yet, as we are still far from the point where all the companies various claims and counter-claims can be added up and compared. It will be weeks before even the preliminary injunction against Apple is decided, and much paper will be added to the pile before then.
The argument comes down to whether a company like Apple, which certainly exerts total control over its hardware-software ecosystem, qualifies as a monopoly. If it is, then the business practices Epic defied may be unlawful and therefore its flouting them will have been justified. If it isn’t, the countersuit may put Epic in rather a bad spot — not just owing Apple millions but unable to pull this trick again.
The burden of proof on Epic is quite serious here, and current antitrust doctrine doesn’t seem likely to define Apple’s App Store (and Google’s — which Apple is also suing along the same lines) as the act of a monopolist. But even if it fails to prove it and is handed a setback in court, Apple being publicly dragged as a potential monopoly, and having the claims evaluated by a judge — even skeptically — is not a good look.
Apple’s countersuit was inevitable given Epic’s high-profile and pretty much admitted breach of contract, but it raises the stakes nevertheless. The company has not specified the scale of the damages it seeks, but eight digits is probably a safe bet. You can read Apple’s suit below.
Nintendo has announced a surprise spin-off prequel to its modern classic Breath of the Wild, an action-focused game called Hyrule Warriors: Age of Calamity. You’ll play the role of Link, as usual, but also the four champions and Princess Zelda herself, in attempting (unsuccessfully, as we know) to fight back the hordes of Ganon 100 years before the Switch launch title.
The game, clearly intended to tide over fans ravenous for the recently teased sequel, is developed by Koei Tecmo, which previously made the first Hyrule Warriors game as part of their long running Warriors series of large-scale battle-em-ups. That one, however, was more of a Zelda-themed action game, very much in the old realistic style that Nintendo ditched for a more painterly, stylized one.
Age of Calamity adopts not just the new look, but the characters and setting from Breath of the Wild, meaning it’s a canon entry in the franchise and a direct prequel.
One of the most interesting features of Breath of the Wild was the Princess, who bucked years of tradition by being not just a damsel in distress (though she is that too) but an interesting character unto herself, more so than Link and most of the champions. Her curiosity and scholarly ambition endeared players and made them see that the warrior they were playing was clever and strong, but little more than that — everyone wanted more Zelda.
Image Credits: Nintendo
The sequel may very well scratch that itch, but in the meantime we’ll get to tool around with the Princess in battle mode in this prequel. That’s a rare treat — she was playable in the previous Hyrule Warriors and in a spare handful of other games — and hopefully a taste of things to come.
Although I recently lamented Nintendo’s conservative and disappointing approach to bringing its classic 3D Mario games to modern audiences, Zelda has been successfully reinvented and updated more than once. The Warriors series isn’t known for breaking new ground — it’s really about killing monsters and enemy soldiers by the hundred — but this could prove a valuable addition to one of gaming’s most beloved franchises.
Microsoft has confirmed via its official Xbox Twitter account that a discless, tiny Xbox called the Series S will be released alongside its forthcoming Xbox Series X. The Series S was initially leaked late Monday, first by Brad Sams on Twitter, and also by Walking Cat. The Xbox account tweeted an image fo the same small design dominated by a large, round vent grill, and said that the estimated retail price at launch for the new version of the console will be $299.
The original leak from Sams also includes the $299 price, and Walking Cat’s leaked trailer video inlaid more details – including noting that the console is 60% smaller than the forthcoming Series X, but that it includes a high-speed 512GB NVMe SSD, with performance offering up to 1440p resolution at 120FPS, along with 4K upscaling. It’ll also support DirectX ray tracing.
There have been rumors about the Series S landing along with the Series X, which Microsoft made official first all the way back in December 2019 (what even was 2019, was it real?). While Microsoft didn’t confirm any of the leaked specs or performance from the trailer, that definitely looks like an official Xbox teaser Walking Cat came across, so I wouldn’t anticipate any surprises there.
Microsoft also didn’t share anything about Series S availability or pre-orders. The launches of both the next-gen Xbox and the PS5 from Sony have been extremely drawn out across massive drip campaigns, and pre-order and availability specifics are still being held close to the chest, much to the frustration of gaming fans. Hopefully this leak and subsequent confirmation means we’re getting close.
It has always been considered a matter of if, and not when, Nintendo would begin capitalizing in earnest on content from beyond the SNES generation. The company is finally showing its intent to do so today — but with an uneven approach that leaves some fans worried about its intentions for other all-time gaming classics from the 64-bit era and beyond.
In a celebratory video of 35 years of Super Mario Bros. history, Nintendo announced a litter of new and old games starring its iconic plumber protagonist.
Nintendo also demonstrated a willingness to experiment with its oldest and in some ways most conservative franchise with Super Mario Bros. 35, a sort of battle royale version of the original game where 35 players compete on the same level, sending hazards to one another and attempting to finish with a variety of win conditions. A logical sequel to Tetris 99, which applied a similar transformation to everyone’s favorite block-based puzzler, and potentially a lot of fun.
But when it came to bringing fan favorites from the N64 and GameCube to the Switch, the company left much to be desired.
Nintendo’s approach to resurrecting its back catalog has been haphazard: Giving away NES and SNES games for free to Nintendo Online subscribers is a nice bonus in a way, but many players have already paid for those games on previous consoles, perhaps multiple times. Why, players have asked, can’t someone just bring their purchase of Kid Icarus over from the Wii’s Virtual Console to the Switch and play it without a subscription? Nintendo has never provided a good answer to this; in the SNES Mini it has provided an excellent alternative — though of course it means buying the game yet again.
The question on countless players’ minds was: Will Nintendo add N64 titles to the library of past-generation games for anyone to access, or gussy them up and sell them separately? With both Mario and Zelda’s 35th anniversaries approaching, this was a very material concern.
As it turns out, Nintendo has somehow threaded the needle with a solution seemingly made to leave everyone wanting something more.
Image Credits: Ninendo
The Super Mario 3D All-Stars collection includes Super Mario 64, Super Mario Sunshine and Super Mario Galaxy, from the N64, GameCube and Wii respectively, and has a full-size $60 price tag. These are all great games, obviously. But being classics doesn’t mean there’s no way to update them for modern audiences.
Take Mario 64. Universally beloved and hugely influential, it is nevertheless a bit long in the tooth in some ways. But the Mario 64 in All-Stars is only brought up to the barest standard of playability on modern consoles: It works with current Switch controllers and runs at an updated resolution. They didn’t even bother changing the original 4:3 aspect ratio!
Amazingly, Nintendo didn’t even include the substantial upgrades it made itself for the DS re-release of the game. As with the original All-Stars for SNES, which included re-drawn sprites and other improvements, this was an opportunity to show the quality of these games while also doing right by fans who have for years had to resort to emulators and mods to make the games suitable for 21st-century consumption.
Instead Nintendo has opted to do the absolute minimum while charging the absolute maximum. What’s more, there seems to be some kind of limited availability that the company hasn’t quite made clear — what goes on sale in a couple weeks will only be available until March of next year. Then what? Nintendo hasn’t said. (I’ve asked for clarification and will update this article if I hear back.)
Image Credits: Nintendo
Long-time customers will not be surprised by Nintendo’s oblique strategy and seeming lack of ambition here. The company has institutionalized a unique combination of extreme conservatism and eye-popping risk-taking. Overdeliver with one hand and underdeliver with the other is Nintendo’s approach, and it was hoped by many players that the former hand would be the one with the Mario anniversary content in it.
It’s troubling not simply because there’s one game that doesn’t justify its price tag good value, but because it signals an underwhelming approach to the entire library of Nintendo classics. With the 35th anniversary of other beloved franchises on the horizon — Zelda and Metroid, for a start — it is a legitimate worry that Nintendo may likewise let down the fan base.
Sure, it may sound a bit like the notorious entitlement expressed by gamers over things like microtransactions, exclusivity agreements and so on. But with Nintendo and these very important titles from its vault, expectations are justifiably different.
With almost no releases on third-party platforms and an aggressive approach to shutting down what it views as IP offenses, Nintendo exercises an iron grip over its content, especially its crown jewels, Mario and Zelda. If we are ever to receive an improved version of Mario 64, or Sunshine, or for that matter Ocarina of Time, not to speak of dozens of other classics, Nintendo is the only one that can provide it.
Sometimes that means a beautiful total redo of a game like Link’s Awakening. But at other times it means we must make do with scraps from the table, as with the arbitrary trickle of NES and SNES games coming to Nintendo Switch Online (itself a bundle of scraps compared with other console subscriptions, it must be said). Everyone right now is thinking that the inevitable Zelda collection will be equally bare bones (and expensive).
The dream players have for decades cherished for example, a multiplayer Mario 64, will never emerge in the wilds of the internet because Nintendo will swoop in with a cease and desist in record time. So they must rely on the company to make those dreams come true, and it is remarkably inconsistent in doing so.
The treasure chest of games Nintendo has just opened the lid on is potentially a source for years of content and will partly define the company’s overarching strategy going forward. But it makes gamers nervous to see Nintendo aiming at their wallets instead of their hearts. Usually it’s at least both.
The hybrid portable gaming system utilizes cameras on-board the Mario and Luigi karts to offer an on-screen augmented reality first-person racing experience. There’s a teaser video out now, highlighting the game just below:
Get ready to experience the fun of Mario Kart in the real world! Use your #NintendoSwitch to control a physical Kart & race through custom courses set up in your home! Mario Kart Live: Home Circuit is available in a Mario or Luigi set, and launches on 10/16. pic.twitter.com/dydiND46ad
As you can see, it offers a familiar Mario Kart feel overlayed on top of your home. There’s a pretty simple set up process involved, with the user spacing out a series of gates to create a circular course — think of it a like a far more fun version of setting up Roomba boundaries. Right now there are only two characters —Mario and Luigi — available for now, each priced at $100. But up to four players can compete with the in-person mode.
From the videos, at least, it looks like a pretty rich experience right out of the box, combining real world obstacles with familiar characters and environments like snowy levels and Piranha Plant-filled jungles.
Each kits includes one racer, four gates and two sign boards. They go up for pre-order soon and start shipping October 16.
India continues to crack down on Chinese apps, Microsoft launches a deepfake detector and Google offers a personalized news podcast. This is your Daily Crunch for September 2, 2020.
The big story: India bans PUBG and other Chinese apps
The Indian government continues its purge of apps created by or linked to Chinese companies. It already banned 59 Chinese apps back in June, including TikTok.
India’s IT Ministry justified the decision as “a targeted move to ensure safety, security, and sovereignty of Indian cyberspace.” The apps banned today include search engine Baidu, business collaboration suite WeChat Work, cloud storage service Tencent Weiyun and the game Rise of Kingdoms. But PUBG is the most popular, with more than 40 million monthly active users.
With Dorian, co-founder and CEO Julia Palatovska said she’s hoping to empower fiction writers and other storytellers to create their own games.
The startup is announcing that it has raised $3.25 million in seed funding led by March Capital Partners, with participation from VGames, Konvoy Ventures, London Venture Partners, Michael Chow (co-creator of the Twitch series “Artificial”), Andover Ventures and talent management company Night Media.
In addition, John Howell, the former vice president of partnerships at Twitch, has joined the board as an independent director.
Palatskova previously worked in gaming as the head of business development at G5 Entertainment, and she said she’d also become entranced by narrative games and interactive fiction. And while there are existing interactive fiction platforms, she saw “an opportunity that I felt was missing,” particularly in the fact that those platforms are “entirely single player, with no opportunity to play and collaborate with other people.”
So she gave me a quick tour of the Dorian platform, showing me how, without coding, a writer can essentially design characters and backgrounds by choosing from a variety of visual assets (and they’ll eventually be able to upload assets of their own), while using a flowchart-style interface to allow the writer to connect different scenes in the story and create player choices. And as Palatskova noted, you can also collaborate on a story in real-time with other writers.
“In terms of writer productivity, I would say there is almost no difference between creating interactive fiction on our engine and just writing fiction,” she said.
Image Credits: Dorian
From what I could see, the resulting games look similar to what you’d find on platforms like Pocket Gems’ Episode, where there aren’t a lot of technical bells and whistles, so the story, dialogue and character choices move to the forefront.
When I brought up the open-source game creation software Twine, Palatskova said Twine is “just a tool.”
“We want to be more like Roblox, both the tools and the distribution,” she said.
In other words, writers use Dorian to create interactive stories, but they also publish those stories using the Dorian app. (The writer still owns the resulting intellectual property.) Palatskova noted that Dorian also provides detailed analytics on how readers are responding, which is helpful not just for creating stories, but also for monetizing via premium story choices.
In fact, Dorian says that in early tests involving around 50,000 players, writers were able to improve monetization by 70% after only one or two iterations. And Palatskova noted that with Dorian’s games — unlike an interactive film such as “Black Mirror: Bandersnatch” —”It’s fast and easy to test multiple branches.”
Dorian is currently invite-only, but the plan is to launch more broadly later this year. Palatskova is recruiting writers with and without gaming experience, but she also expects plenty of successful contributions to come from complete novices. She wants Dorian to be “a completely open platform, like Roblox or Twitch for writers.”
“Dorian’s success in creating an interactive platform that values storytelling while prioritizing monetization for its writers is a game-changer,” said March Capital’s Gregory Milken in a statement. “Julia and her team are creating a community that is primed to capture the attention of today’s influential but underrepresented audiences of diverse content creators.”
Update: An earlier version of this post incorrectly stated that Dorian had raised $3.15 million.
“High Score” is a new Netflix documentary series that looks back at the early years of the video game industry.
Across six episodes, key developers, artists, executives and even players discuss the initial arcade and home console boom, the emergence of Nintendo, the rise of adventure and role-playing games, the battle between Sega and Nintendo, the success and ensuing controversy over fighting games like Mortal Kombat and the development of 3D gameplay in Starfox and Doom.
We review “High Score” on the latest episode of the Original Content podcast, which inevitably leads us to get a little wistful our own relationship with these classic games.
For older gamers, the series provides some pleasant jolts of nostalgia, and it’s also a useful primer for anyone who isn’t familiar with the industry’s history. It also taking time to highlight some lesser-known stories, and it’s full of fun touches, like retro animation illustrated moments that weren’t captured on film.
It’s worth remembering, though, that “High Score” focuses on just a few key figures and a few key games, which means that a number of important developments are ignored or only touched on briefly.
We are disappointed that we have had to terminate the Epic Games account on the App Store. We have worked with the team at Epic Games for many years on their launches and releases. The court recommended that Epic comply with the App Store guidelines while their case moves forward, guidelines they’ve followed for the past decade until they created this situation. Epic has refused. Instead they repeatedly submit Fortnite updates designed to violate the guidelines of the App Store. This is not fair to all other developers on the App Store and is putting customers in the middle of their fight. We hope that we can work together again in the future, but unfortunately that is not possible today.
You missed your chance. Epic is off the App Store now.
Apple also said that Epic has been creating support issues by directing frustrated users toward AppleCare.
This is the latest development in the Epic-Apple dispute, which began earlier this month when the developer introduced support for direct payments in Fortnite, attempting to circumvent the 30% cut that Apple takes on App Store payments. This prompted Apple to boot Fortnite from the App Store, with Epic immediately launching a lawsuit and a publicity campaign that accused Apple of abusing its market power.
Fresh off a $40 million Series A round, edge AI specialist Kneron today announced the launch of its newest custom chip, the Kneron KL 720 SoC.
With funding from the likes of Alibaba, Sequoia, Horizons Ventures, Qualcomm and SparkLabs Taipei (as well as a few undisclosed backers), it’s worth taking the company’s efforts seriously, and Kneron has no qualms about comparing its chips to those of Intel and Google, for example. It argues that its KL 720 is twice as energy efficient as Intel’s latest Movidius chips and four times more efficient than Google’s Coral Edge TPU at running the MobileNetV2 image recognition benchmark.
Compared to its previous generation of chips, this updated version can process 4K still images and videos at a 1080P resolution. It also features a number of new audio recognition breakthroughs for the company, which Kneron says will allow devices that use its chips to bypass the standard wake words on other chips and have immediate conversations with the device.
Image Credits: Kneron
Overall, Kneron promises 1.5 TOPS in performance from its SoC, which uses an Arm Cortex M4 as its main control unit. The average power consumption for the full package is around 1.2W.
“KL720 combines power with unmatched energy-efficiency and Kneron’s industry-leading AI algorithms to enable a new era for smart devices,” said Kneron founder and CEO Albert Liu. “Its low cost enables even more devices to take advantage of the benefits of edge AI, protecting user privacy, to an extent competitors can’t match. Combined with our existing KL520, we are proud to offer the most comprehensive suite of AI chips and software for devices on the market.”
With KNEO, the company also offers an interesting networking solution for devices that are powered by its chips. With this, developers can create their own private networks and connect multiple sensors without having to route data to the cloud. That network uses blockchain technology to secure the data and in a bit of a twist, Kneron hopes to create a marketplace that will allow consumers to exchange or sell their data to buyers.
For now, though, the company seems to be more focused on the core hardware. That’s also an area where we’ve seen the competition heat up, with other well-funded startups like Hailo also recently launching their latest chips.
Figma for filmmakers, TikTok for English learners and a cryptocurrency twist that actually makes sense?
After 197 pitches, Y Combinator’s Demo Day for its Summer 2020 cohort has concluded. While the fanfare, run-ins and fortune cookies were missing in this virtual session, it was still exciting to see and hear founders from 26 countries pitch their passions. Of course, some opted for a more quiet route, raising millions before the two-day pitch session even kicked off.
Participating startups spanned a number of sectors: we saw companies in the future of work, sustainability, no-code, consumer, edtech and delivery solutions. Several entrepreneurs aimed big at e-mail, small at socks and straight at Shopify’s recent success.
While TechCrunch reporters aren’t in the business of cutting checks or predicting success, read on to learn about the 12 startups that stuck out to us for a variety of reasons (apart from their Zoom backgrounds).
CarbonChain may be the company that times the carbon market correctly. Now that the European Union and other regions are taking a serious look at penalizing businesses that fail to reduce carbon emissions, a service that provides accurate accounting for a company’s carbon footprint will be increasingly valuable.
And if the company can add marketplace and offsetting services on the back of its assessments, then its proposition becomes even more valuable. But what really makes CarbonChain stand out is the rigor with which it approaches its measurements.
The company uses independent software tools to make a digital twin of the carbon-emitting assets in a company’s business and claims that it can determine the emissions footprint of operations down to a cup of coffee (it also has models for the carbon footprint of heavy industrial equipment in the world’s most polluting industries).
For the world to address its carbon emissions, companies must understand their contribution to the problem. CarbonChain could be an invaluable tool in that effort.
There was Sumo Logic in the morning and JFrog a bit later on. Unity filed in there as well. Snowflake also dropped, along with Asana later in the day. If you were dog-tired just reading Twitter, we understand. This morning, we’re going to catch you up on the key facts from each offering.
But we’re not going to discuss every recent IPO filing. We’re not including X-Peng, a Chinese electric vehicle company that feels a bit afield from the largely-SaaS cohort that just went public (more on it here, if you’d like). Or AmWell, which does health stuff. And we’re going to leave Corsair, a gaming hardware company that’s going public, alone as well.
We have to focus, so we’re niching down to the most traditional venture capital and startup fare on offer. It’s not like we’ll lack for things to say. What follows is a digest of basic facts and IPO details just for you.
Five IPOs and Alex’s funeral
For each company, we’ll discuss what they do, how much they have raised, their initial IPO raise expectations and their financial performance. We’ll wrap with valuation notes as we can.
Asana provides a team-focused task-management service. In competition with startups like Monday.com, Asana has raised $213.5 million, according to PitchBook data, along with around $210 million in debt most recently. The company is pursuing a direct listing, so it does not have a traditional IPO raise target. You can read its filing here.
Even as its main competitor, Epic Games, is in the throes of a very public fight with Apple over the fees the computer giant charges developers who sell applications (including games) on its platform (which has seen Epic’s games get the boot from the App Store), Unity has plowed ahead narrowing its losses and maintaining its hold on over half of the game development market.
For the first six months of 2020, the company lost $54.2 million on $351.3 million in revenue. The company narrowed its losses compared to 2019, when the company lost $163.2 million on $541.8 million in revenue, and 2018 when the company lost $131.6 million on $380.8 million in revenue. As of June 30, 2020 the company had total assets of $1.29 billion and $453.2 million in cash.
Increasing revenue and narrowing losses are things that investors like to see in companies that they’re potentially going to invest in, as they point to a path to profitability. Another sign of the company’s success is the number of customers that contribute more than $100,000 in annual revenue. In the first six month of the year, Unity had 716 such customers, pointing to the health of its platform.
Unlike Epic Games, Unity has long worked with the major platforms and gaming companies to get their engine in front of as many developers and gamers as possible. In fact, the company estimates that 53 percent of the top 1,000 mobile games on the Apple App Store and Google Play Store and over 50 percent of mobile, personal computer and console games were made with Unity.
Some of the top titles that the platform claims include Nintendo’s Mario Kart: Tour, Super Mario Run and Animal Crossing: Pocket Camp; Niantic’s Pokémon Go and Activision’s recent Call of Duty: Mobile are also Unity games.
The knock against Unity is that it’s not as powerful as Epic’s Unreal rendering engine, but that hasn’t stopped the company from making forays into industries beyond gaming – something that it will need to continue doing if it’s to be successful.
Unity already has a toehold in Hollywood, where it was used to recreate the jungle environment used in Disney’s Lion King remake (meanwhile, much of The Mandalorian was created using Epic’s Unreal engine).
Of course, Unity’s numbers also reveal that the size of its business is currently a bit smaller than its biggest rival. In 2019, Epic said it had earnings of $730 million on revenue of $4.2 billion, according to VentureBeat . And the North Carolina-based game developer is now worth $17.3 billion.
Still, the games market is likely big enough for both companies to thrive. “Historically there has been substantial industry convergence in the games developer tools business, but over the past decade the number of developers has increased so much, I believe the market can support two major players,” Piers Harding-Rolls, games analyst at Ampere Analysis, told the Financial Times.
Venture investors in the Unity platform have waited a long time for this moment, and they’re certainly confident in the company’s prospects.
The last investment round valued the company at $6 billion with the secondary sale of $525 million worth of the company’s shares.