Los Angeles

Canoo takes the covers off of its debut electric vehicle

Posted by | Android, automotive industry, Canoo, chief technology officer, China, driver, east coast, electric vehicle, Los Angeles, michigan, Netflix, operating systems, Rivian, TC, transport, United States, vw, west coast | No Comments

The Los Angeles-based startup Canoo has finally unveiled its first model, the eponymously named canoo.

The Canoo designers have departed pretty radically from the traditional designs that other electric vehicle manufacturers have favored going with something that looks more like a VW Microbus than the sport utility vehicle that Byton is aiming for, or Tesla and Fisker’s sportscars and sedans or Rivian’s electric trucks.

Remarkably, Canoo has completed the design and engineering of its first model in just 19 months and is preparing its vehicles for production through a contract manufacturer. The first cars are slated to appear on the road by 2021, according to the company’s current leader, Ulrich Kranz.

Kranz, who initially came on board as the company’s chief technology officer, took over the day-to-day operations of Canoo after Stefan Krause, Canoo’s co-founder and chief executive, stepped away from the company in August for personal reasons, as The Verge previously reported. 

The two key features that Canoo was designing for were space and value, according to a statement from Kranz, and the first car from the company has plenty of both.

Canoo has beta cars on site at its Los Angeles headquarters where prospective partners and customers can test out the vehicles, which were made by an undisclosed contract manufacturer based in Michigan. “We will crank out a couple of cars which will be used to verify and confirm the simulations we have done so far,” says Kranz.

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Canoo has spent the past year discussing the development of its prototype vehicle with the manufacturer so the company could provide advice on how to design and develop the car.

Canoo will launch its first vehicles in the Los Angeles market and expects to not only provide its “skateboard” platform for its own vehicles, but potentially work with other customers that would put their own cabin on top of the Canoo platform, Kranz says.

The company intends to go to market with an entirely new business model by providing customers with its cars for a monthly subscription fee. That service will likely include perks like automatic vehicle registration, maintenance, insurance management and charging through a single app on a customer’s phone. The idea, the company says, is to bring convenience and afforability of a Netflix movie service to the auto industry.

The first vehicle will have enough room for seven people, with the interior space of a large sport utility vehicle in a car with the footprint of a small compact car, the company says. In the back, seats are positioned in a semicircular formation against the sides and rear of the vehicle, while the front cabin is arranged like a sofa, according to Kranz.

“Cars always have been designed to convey a certain image and emotion; however, we chose to completely rethink car design and focus on what future users will actually need. Thus, we came up with this loft-inspired vehicle,” says Richard Kim, in Charge of Design at Canoo. “When you subscribe, you think differently about a car – now the value is defined by the user benefit. We implemented the Bauhaus philosophy, which is centered around minimalism and functionality, and started with the reduction to the absolute minimal need. Next, we applied that approach to the seamless connectivity with the personal devices customers care most about – their phones.”

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Entertainment systems are dependent on customers’ own devices and the canoo is compatible with both iOS and Android operating systems. Rather than having a central display, the company expects that drivers and passengers will want to use their own navigation and apps in the vehicle.

Kranz says it was also made with autonomy in mind, and while the current system is arrayed with seven cameras, five radars and 12 ultra sonic sensors to provide level two autonomy. Kranz is especially proud of a new feature which has a video camera focused on the driver to monitor their actions and avoid unnecessary alerts when they’re operating a vehicle safely.

We watch the face and the meaning of the driver with the camera” Kranz says. “When the camera recognizes that the driver pays attention… like looking to the right side and checking blind spots, we don’t warn them with an alert… Because people sometimes turn off  the warning systems.” 

The heart of the Canoo system though, is its “skateboard” architecture, which houses the batteries and the electric drivetrain in a chassis underneath the vehicle’s cabin. All of the companies vehicles will have the same base and different cabins to create all sorts of vehicles for different applications, the company says.

The first vehicle has a five-star safety rating and includes driver and passenger airbags throughout the canoo. The skateboard platform can also support dual, front, or rear motor configurations the company said.  

Finally, the company says it will have the first truly steer-by-wire vehicle on the market without a hardware connection between the steering wheel and the wheels.

Steering is conducted by electric signals only, with a fully redundant control system that the company says has some long-term benefits for future designs. Steer-by-wire offers both weight savings and gives Canoo flexibility on where to locate the steering wheel to accommodate different designs and . driver positions.

As for range, the company’s first car has a range of 250 miles and can reach an 80% charge in less than 30 minutes. Its battery pack is fastened directly to the skateboard structure and saves more space since there’s no separate structure. The battery also is able to provide torsional rigidity and support for the vehicle since its resting directly on the chassis.

Kranz wouldn’t say how much Canoo will charge for its subscription service, but said that the company can reduce its cost because it can depreciate the vehicle’s value over a seven-to-ten year timeframe. “These savings we will be able to give back to the customer,” he said. And even with the low price, Kranz expects to make a mint with his new company. “We want to be the first EV company that makes a profit with an EV,” he says.

The rental model will help as will the company’s conservative rollout plan. Kranz says that Canoo will start offering its subscription vehicles in one geography and scale slowly from there.

“We will roll out city-by-city,” he says. “Eight to ten cities represent more than 70% of all the electric vehicle population [so] there is no need to provide our EV nationwide.”

The plan for 2021 is to launch in Los Angeles and have another eight cities account for the company’s U.S. market. That means four on the West Coast and four on the East Coast, according to Kranz.

“After the launch in the  U.S. we are considering launching the vehicle in China… There are 18 cities that represent 75% of the EV population in China,” he said.

The controlled expansion plans and modest goals for geographical reach should be a big benefit for the company, according to Kranz.

“It gives us the big advantage that we can  easily control our fleet and we are ramping up in a more conservative way and we are not bragging that we can churn out hundred thousand of cars,” he says. “We know how difficult it is to manufacture a good quality car at a high pace.”

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Launching from beta, ProGuides is making money ensuring that gamers never play alone

Posted by | Advancit Capital, east coast, esports, game design, gamer, Gaming, league of legends, Los Angeles, ProGuides, Quest Venture Partners, Startups, TC, video gaming | No Comments

When ProGuides pulled the covers off of its service earlier this year, the young Los Angeles-based startup intended to give gamers a way to train with professional and semi-pro esports players from around the world.

But as users signed on to the service, it became clear that they weren’t looking for training necessarily… Instead, what players wanted was a ringer.

“After we launched the beta, we found some interesting user behavior,” says Sam Wang. “We found that gamers were experienced already and wanted experienced players who are better than [the matches] the game can provide… At the end of the day you do get to play with someone pretty awesome and is something that I think can make games better.

That’s right, ProGuides is pitching a marketplace for experienced gamers so that its customers aren’t randomly matched with some noob if they can’t game with their usual partners.

“Our tagline is ‘Play with pros’ now,” says Wang. “We already have over 5,000 sessions that were played in the last two months.”

The professional gamers who list their services on the site charge an average of $10 per session and ProGuides takes about a 25% cut. The company lowers its rates for popular gamers or gamers who are willing to spend more time on the platform either selling their services or actually coaching esports players.

Wang says that pros on the platform are making anywhere from $750 to $2,500 per month and that there are currently 250 coaches on the platform.

A typical session on ProGuides lasts around 45 minutes and players are available for Fortnite, League of Legends, Super Smash Brothers, CS:GO and Hearthstone.

ProGuides raised $1.9 million in pre-seed funding last June. The company is backed by Amplify, an LA-based early-stage investor and company accelerator, Quest Venture Partners, Greycroft Tracker fund and the GFR Fund.

The LA-based company also has some venture-backed competition on the East Coast. Gamer Sensei, which has raised roughly $6 million (according to Crunchbase) has a similar proposition. It’s backed by Accomplice and Advancit Capital.

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Through crowdsourcing, Cerberus Interactive wants to take location-based gaming to the masses

Posted by | Age of Empires, augmented reality, austin, bangladesh, Cerberus Interactive, games, Gaming, Los Angeles, New Orleans, niantic, Pokémon Go, Prince, Reddit, Salman Khan, simulation, Software, steve huffman, TC, Toshiba, video gaming | No Comments

Sami Khan began his work in the startup world by marketing mobile-based investment services like Acorns.

Now the marketer who helped grow that business to a nearly $1 billion valuation is turning his attention to location-based gaming in the hopes that he can take on leading contender Niantic with a faster, more flexible and fan-driven approach to game development with his new startup, Cerberus Interactive.

Khan’s pitch is that he’s taking the skills he honed building up services like Acorns or the browser extension for bargain hunters, Honey, to game development to make games more viral from their inception.

The biggest thing is how do you de-risk what is perceived as a hit-driven industry?,” Khan asks. “Games are closer to digital apps than back in the days of the console and companies should ship it like an e-commerce concept… If adoption of the game is going to be the decision factor of whether a game fails or succeeds… why isn’t the adoption of the game tested before the title is built or while the game is being conceived?”

So for his first foray into gaming, Khan is combining a crowdsourced approach to the development of the game and applying it to what many people think is gaming’s next big frontier — the location-based game phenomenon that hit its stride with Niantic’s Pokémon GO.

Right now in location-based games you have the behemoth which is Niantic,” says Khan. “Right now the gaming industry looks at location-based games as its own sub genre. But when we look at location-based games, we believe that location-based games have an aspect that it is a game mechanic within other games.” 

The first game that Cerberus is developing is a base-building simulator akin to a title like “Age of Empires,” but based on real-world locations. “Simulation games or casual games with location built in will have a bonus or an advantage over the stationary games that we play today,” says Khan.

The “Atlas Empires” title that Cerberus is currently developing is being made in concert with the gamers who might want to play it. So far, an undisclosed number of customers are already paying to have a say in certain aspects of the game’s development — kind of like a premier tier within a crowdfunding campaign.

Khan, a New Orleans native who splits his time between Los Angeles and Austin, has enlisted some marquee investors in his bid to challenge both the traditional ways in which games have been developed and the current industry leader.

Strategic investor MobilityWare has signed on to back the company along with individual investors like Steve Huffman, the co-founder and chief executive of Reddit, and Blake Chandler, the chief business officer of the runaway social network hit, TikTok.

Khan traces his love of games to his time visiting his cousins in Bangladesh and playing “Prince of Persia” on an early Toshiba laptop. “I remember sitting around the computer, watching my oldest cousin play because my dad didn’t want any of the kids touching the laptop,” Khan says.

So far the beta version of “Atlas Empires” has had 50,000 downloads and has about 1,000 daily players, Khan says. The commercial version of the game is expected to go live in the first quarter of 2020, says Khan.

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LA-based gaming company, Scopely, expands in Spain and Ireland

Posted by | barcelona, Brendan Iribe, dublin, Europe, Evolution Media Partners, Gaming, Greenspring Associates, greycroft, greycroft partners, Highland Capital Partners, Horizons Ventures, ireland, jimmy iovine, Kobe Bryant, Los Angeles, Peter Chernin, peter guber, scopely, spain, Startups, take two interactive, TC, The Chernin Group | No Comments

The Los Angeles-based gaming company Scopely is expanding its geographical footprint in Spain and Ireland.

The company is building out its Barcelona offices, tripling its office space and planning to significantly expand its 100-person-strong team in the city. Meanwhile, Scopely is also planning to invest heavily in expanding its strategy-focused game studio, DIGIT, in Dublin.

Scopely didn’t say how many jobs it would be adding in either location.

The company has now hit lifetime revenue of more than $1 billion across its franchises and recently launched “Star Trek Fleet Command” and “Looney Tunes World of Mayhem.” Scopely also has licenses to develop games for World Wrestling Entertainment and The Walking Dead franchise.

“We are thrilled to expand our European footprint to accommodate our exponential growth,” said Javier Ferreira, co-CEO of Scopely, in a statement. “I am excited to further lean in to the Barcelona market, which has top-quality talent. The same is true in Dublin with top tech talent flocking to the area, and both offices have amassed impressive highly-specialized expertise. Our Dublin and Barcelona teams play a critical role in the Scopely journey, and we are actively hiring across both markets.”

The company also plans to double its footprint in its hometown of Los Angeles in 2020.

The company has raised more than $250 million in financing to date, from investors including Greenspring Associates, Greycroft Partners, Revolution Growth, Evolution Media Partners, Highland Capital Partners, Horizons Ventures, Sands Capital Ventures, The Chernin Group, Take-Two Interactive, Kobe Bryant, Arnold Schwarzenegger, Peter Guber, Jimmy Iovine and Brendan Iribe.

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Mobile messaging financial advisory service Stackin’ adds banking features and raises cash

Posted by | Banking, computing, credit scoring, Experian, Finance, Information technology, Los Angeles, market research, Mobile, personal finance, radius bank, Recent Funding, social leverage, Stackin', Startups, TC, TechStars, Twilio, uproxx, wavemaker partners | No Comments

When Stackin’ initially pitched itself as part of the Techstars Los Angeles accelerator program two years ago, the company was a video platform for financial advice targeting a millennial audience too savvy for traditional advisory services.

Now, nearly two years later, the company has pivoted from video to text-based financial advice for its millennial audience and is offering a new spin on lead generation for digital banks.

The company has launched a new, no-fee, checking and savings account feature in partnership with Radius Bank, which offers users a 1% annual percentage yield on deposits.

And Stackin’ has raised $4 million in new cash from Experian Ventures, Dig Ventures and Cherry Tree Investments, along with supplemental commitments from new and previous investors including Social Leverage, Wavemaker Partners and Mucker Capital.

“Stackin’ has a unique and highly effective approach to connect and communicate with an entire generation of younger consumers around finance,” said Ty Taylor, group president of Global Consumer Services at Experian, in a statement.

Founded two years ago by Scott Grimes, the former founder of Uproxx Media, and Kyle Arbaugh, who served as a senior vice president at Uproxx, Stackin’ initially billed itself as the Uproxx of personal finance.

It turns out that consumers didn’t want another video platform.

“Stackin’ is fundamentally changing the shape and context of what a financial relationship means by creating a fun, inclusive and judgement free environment that empowers our users to learn and take action through messaging,” said Scott Grimes, CEO and co-founder of Stackin’, in a statement. “This funding allows us to build out new features around banking and investing that will enhance the relationship with our customers.”

Later this fall the company said it would launch a new investment feature that will encourage Stackin’ users to participate in the stock market. It’s likely that this feature will look something like the Acorns model, which encourages users to invest in diversified financial vehicles to get them acquainted with the stock market before enabling individual trades on stocks.

According to Grimes, the company made the switch from video to text in March 2018 and built a custom messaging platform on Twilio to service the company’s 500,000 users.

“In a short time, we have built a large customer base with a demographic that is typically hard to reach. Having financial institutions like Experian come on board as an investor is a testament that this model is working,” Grimes wrote in an email.

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Delane Parnell’s plan to conquer amateur esports

Posted by | accelerator, Alexis Ohanian, Amazon, Apps, Brian Wong, Canada, coach, delane parnell, detroit, esports, Facebook, Fundings & Exits, Gaming, league of legends, Los Angeles, Ludlow Ventures, Matt Mazzeo, Media, national basketball association, north america, Personnel, Peter Pham, playvs, Riot Games, rocket fiber, Rocket League, science, serial entrepreneur, Sports, Spotify, Startups, Talent, TC, Twitch, United States, Venture Capital, video game | No Comments

Most of the buzz about esports focuses on high-profile professional teams and audiences watching live streams of those professionals.

What gets ignored is the entire base of amateurs wanting to compete in esports below the professional tier. This is like talking about the NBA and the value of its sponsorships and broadcast rights as if that is the entirety of the basketball market in the US.

Los Angeles-based PlayVS (pronounced “play versus”) wants to become the dominant platform for amateur esports, starting at the high school level. The company raised $46 million last year—its first year operating—with the vision that owning the infrastructure for competitions and expanding it to encompass other social elements of gaming can make it the largest gaming company in the world.

I recently sat down with Founder & CEO Delane Parnell to talk about his company’s formation and growth strategy. Below is the transcript of our conversation (edited for length and clarity):

Founding PlayVS

Eric P: You have a fascinating background as a serial entrepreneur while you were a teenager.

Delane P.: I grew up on the west side of Detroit and started working at the cell phone store of a family friend when I was 13. When I turned 16 or so, I joined two guys in opening our own Metro PCS franchise. And then two additional franchises. And I was on the founding team of a car rental company called Executive Rental Car.

Eric P: And this segued into tech startups after meeting Jon Triest from Ludlow Ventures?

Delane P: He got me a ticket to the Launch conference in SF, and that experience inspired me to start a Fireside Chat series in Detroit that brought in people like Brian Wong from Kiip and Alexis Ohanian from Reddit to speak. Starting at 21, I worked at a venture capital firm called IncWell based in Birmingham, Michigan then joined a startup called Rocket Fiber.

We were focused on internet infrastructure – this is 2015-ish – and I was appointed to lead our strategy in esports. So I met with many of the publishers, ancillary startups, tournament organizers, and OG players and team owners. Through the process, I became passionate about esports and ended up leaving Rocket Fiber to start a Call of Duty team that I quickly sold to TSM.

Eric P: What then drove you to found PlayVS? Did it seem like an obvious opportunity or did it take you a while to figure it out?

Delane P.: What esports means is playing video games competitively bound to governance and a competitive ruleset. As a player, what that experience means is you play on a team, in a position, with a coach, in a season that culminates in some sort of championship.

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DroneBase raises capital and partners with FLIR Systems to train pilots on thermal imaging tech

Posted by | dronebase, drones, electronics, Gadgets, hardware, Los Angeles, Media, targeting, TC, technology, telecommunications | No Comments

Publicly traded sensor technology developer FLIR Systems is investing in a strategic round of funding for the outsourced drone imaging company, DroneBase.

The two companies are also partnering to provide FLIR’s thermal imaging technology and training services to DroneBase’s stable of pilots.

Terms of the investment were not disclosed.

“Our investment in DroneBase helps expand the adoption of FLIR thermal imaging technology by putting it in the hands of more pilots who fly drones every day,” said Jim Cannon, the president and chief executive of FLIR, in a statement. “DroneBase’s enterprise pilot network will receive training by professional thermographers, enabling DroneBase to offer specialized thermal inspection services for customers on a wider scale, and creating an opportunity for FLIR to incorporate additional service offerings through DroneBase in the future.”

Los Angeles-based DroneBase has contracted pilots to complete more than 100,000 commercial missions in 70-plus countries for residential and commercial real estate, insurance, telecommunications, construction and media companies, according to a statement.

Through FLIR’s Infrared Training Center, FLIR and DroneBase will develop a specialized training program that will be certified exclusively by DroneBase.

“Through FLIR’s strategic investment in DroneBase, we are now able to offer scalable thermal solutions to enterprises of any size,” said Dan Burton, founder and chief executive of DroneBase, in a statement. “This access to valuable data will allow stakeholders to make better decisions about their most critical assets. Like myself, many DroneBase pilots relied on FLIR products when they served in the military. This integration will offer military veterans a chance to work with FLIR again and leverage their training in their civilian lives.”

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The team behind Baidu’s first smart speaker is now using AI to make films

Posted by | AI, alpha, animation, Apple, artificial intelligence, Asia, Baidu, Beijing, california, Entertainment, Entrepreneur, Gaming, HBO, Los Angeles, natural language processing, Pixar Animation Studios, Series A, Speaker, Virtual reality, Westworld, Y Combinator | No Comments

The HBO sci-fi blockbuster Westworld has been an inspiring look into what humanlike robots can do for us in the meatspace. While current technologies are not quite advanced enough to make Westworld a reality, startups are attempting to replicate the sort of human-robot interaction it presents in virtual space.

Rct studio, which just graduated from Y Combinator and ranked among TechCrunch’s nine favorite picks from the batch, is one of them. The “Westworld” in the TV series, a far-future theme park staffed by highly convincing androids, lets visitors live out their heroic and sadistic fantasies free of consequences.

There are a few reasons why rct studio, which is keeping mum about the meaning of its deliberately lower-cased name for later revelation, is going for the computer-generated world. Besides the technical challenge, playing a fictional universe out virtually does away the geographic constraint. The Westworld experience, in contrast, happens within a confined, meticulously built park.

“Westworld is built in a physical world. I think in this age and time, that’s not what we want to get into,” Xinjie Ma, who heads up marketing for rct, told TechCrunch. “Doing it in the physical environment is too hard, but we can build a virtual world that’s completely under control.”

rct studio

Rct studio wants to build the Westworld experience in virtual worlds. / Image: rct studio

The startup appears suitable to undertake the task. The eight-people team is led by Cheng Lyu, the 29-year-old entrepreneur who goes by Jesse and helped Baidu build up its smart speaker unit from scratch after the Chinese search giant acquired his voice startup Raven in 2017. Along with several of Raven’s core members, Lyu left Baidu in 2018 to start rct.

“We appreciate a lot the support and opportunities given by Baidu and during the years we have grown up dramatically,” said Ma, who previously oversaw marketing at Raven.

Let AI write the script

Immersive films, or games, depending on how one wants to classify the emerging field, are already available with pre-written scripts for users to pick from. Rct wants to take the experience to the next level by recruiting artificial intelligence for screenwriting.

At the center of the project is the company’s proprietary engine, Morpheus. Rct feeds it mountains of data based on human-written storylines so the characters it powers know how to adapt to situations in real time. When the codes are sophisticated enough, rct hopes the engine can self-learn and formulate its own ideas.

“It takes an enormous amount of time and effort for humans to come up with a story logic. With machines, we can quickly produce an infinite number of narrative choices,” said Ma.

To venture through rct’s immersive worlds, users wear a virtual reality headset and control their simulated self via voice. The choice of audio came as a natural step given the team’s experience with natural language processing, but the startup also welcomes the chance to develop new devices for more lifelike journeys.

“It’s sort of like how the film Ready Player One built its own gadgets for the virtual world. Or Apple, which designs its own devices to carry out superior software experience,” explained Ma.

On the creative front, rct believes Morpheus could be a productivity tool for filmmakers as it can take a story arc and dissect it into a decision-making tree within seconds. The engine can also render text to 3D images, so when a filmmaker inputs the text “the man throws the cup to the desk behind the sofa,” the computer can instantly produce the corresponding animation.

Path to monetization

Investors are buying into rct’s offering. The startup is about to close its Series A funding round just months after banking seed money from Y Combinator and Chinese venture capital firm Skysaga, the startup told TechCrunch.

The company has a few imminent tasks before achieving its Westworld dream. For one, it needs a lot of technical talent to train Morpheus with screenplay data. No one on the team had experience in filmmaking, so it’s on the lookout for a creative head who appreciates AI’s application in films.

rct studio

Rct studio’s software takes a story arc and dissects it into a decision-making tree within seconds. / Image: rct studio

“Not all filmmakers we approach like what we do, which is understandable because it’s a very mature industry, while others get excited about tech’s possibility,” said Ma.

The startup’s entry into the fictional world was less about a passion for films than an imperative to shake up a traditional space with AI. Smart speakers were its first foray, but making changes to tangible objects that people are already accustomed to proved challenging. There has been some interest in voice-controlled speakers, but they are far from achieving ubiquity. Then movies crossed the team’s mind.

“There are two main routes to make use of AI. One is to target a vertical sector, like cars and speakers, but these things have physical constraints. The other application, like Alpha Go, largely exists in the lab. We wanted something that’s both free of physical limitation and holds commercial potential.”

The Beijing and Los Angeles-based startup isn’t content with just making the software. Eventually, it wants to release its own films. The company has inked a long-term partnership with Future Affairs Administration, a Chinese sci-fi publisher representing about 200 writers, including the Hugo award-winning Cixin Liu. The pair is expected to start co-producing interactive films within a year.

Rct’s path is reminiscent of a giant that precedes it: Pixar Animation Studios . The Chinese company didn’t exactly look to the California-based studio for inspiration, but the analog was a useful shortcut to pitch to investors.

“A confident company doesn’t really draw parallels with others, but we do share similarities to Pixar, which also started as a tech company, publishes its own films, and has built its own engine,” said Ma. “A lot of studios are asking how much we price our engine at, but we are targeting the consumer market. Making our own films carry so many more possibilities than simply selling a piece of software.”

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Snap is channeling Asia’s messaging giants with its move into gaming

Posted by | alibaba, Apps, Asia, Australia, Bitmoji, Canada, China, computing, e-commerce, epic games, Evan Spiegel, Facebook, food, France, game developers, Gaming, instagram, Instant Messaging, Japan, josh constine, Kakao, Los Angeles, messaging apps, Messenger, nhn japan, Nintendo, operating systems, player, Snap, Snapchat, Social, social media, social network, Software, Southeast Asia, Startups, Tencent, United Kingdom, United States, WeChat, WhatsApp | No Comments

Snap is taking a leaf out of the Asian messaging app playbook as its social messaging service enters a new era.

The company unveiled a series of new strategies that are aimed at breathing fresh life into the service that has been ruthlessly cloned by Facebook across Instagram, WhatsApp and even its primary social network. The result? Snap has consistently lost users since going public in 2017. It managed to stop the rot with a flat Q4, but resting on its laurels isn’t going to bring back the good times.

Snap has taken a three-pronged approach: extending its stories feature (and ads) into third-party apps and building out its camera play with an AR platform, but it is the launch of social games that is the most intriguing. The other moves are logical, and they fall in line with existing Snap strategies, but games is an entirely new category for the company.

It isn’t hard to see where Snap found inspiration for social games — Asian messaging companies have long twinned games and chat — but the U.S. company is applying its own twist to the genre.

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Consolidation is coming to gaming, and Jam City raises $145 million to capitalize on it

Posted by | App Annie, Bank of America, Chris DeWolfe, computing, Disney, Electronic Arts, Europe, Facebook, Gaming, helsinki, jam city, King, Los Angeles, mobile game, Pixar, Recent Funding, silicon valley bank, Software, Startups, TC, toronto, United States, Zynga | No Comments

A slew of banks are coming together to back a new roll-up strategy for the Los Angeles-based mobile gaming studio Jam City and giving the company $145 million in new funding to carry that out.

There’s no word on whether the new money is in equity or debt, but what is certain is that JPMorgan Chase Bank, Bank of America Merrill Lynch and syndicate partners, including Silicon Valley Bank, SunTrust Bank and CIT Bank, are all involved in the deal.

“In a global mobile games market that is consolidating, Jam City could not be more proud to be working with JPMorgan, Bank of America Merrill Lynch, Silicon Valley Bank, SunTrust Bank and CIT Group to strategically support the financing of our acquisition and growth plans,” said Chris DeWolfe, co-founder and CEO of Jam City. “This $145 million in new financing empowers Jam City to further our position as a global industry consolidator. As we grow our global business, we are honored to be working alongside such prestigious advisers who share Jam City’s mission of delivering joy to people everywhere through unique and deeply engaging mobile games.”

The new money comes after a few years of speculation on whether Jam City would be the next big Los Angeles-based startup company to file for an initial public offering. It also follows a new agreement with Disney to develop mobile games based on intellectual property coming from all corners of the mouse house — a sweet cache of intellectual property ranging from Pixar, to Marvel, to traditional Disney characters.

Jam City is coming off a strong year of company growth. The Harry Potter: Hogwarts Mystery game, which launched last year, became the company’s fastest title to hit $100 million in revenue.

Add that to the company’s expansion into new markets with strategic acquisitions to fuel development and growth in Toronto and Bogota and it’s clear that the company is looking to make more moves in 2019.

Jam City already holds intellectual property for a new game built on Disney’s “Frozen 2,” the company’s newly acquired Fox Studio assets like “Family Guy” and the Harry Potter property. Add that to its own Cookie Jam and Panda Pop properties and it seems like the company is ready to make moves.

Meanwhile, games are quickly becoming the go-to revenue driver for the entertainment industry. According to data collected by Newzoo, mobile games revenue reached a record $63.2 billion worldwide in 2018, representing roughly 47 percent of the total revenue for the gaming industry in the year. That number could reach $81.3 billion by 2020, the Newzoo data suggests.

Roughly half of the U.S. plays mobile games, and they’re spending significant dollars on those games in app stores. App Annie suggests that roughly 75 percent of the money spent in app stores over the past decade has been spent on mobile games. And consumers are expected to spend roughly $129 billion in app stores over the next year. The data and analytics firm suggests that mobile gaming will capture some 60 percent of the overall gaming market in 2019, as well.

All of that bodes well for the industry as a whole, and points to why Jam City is looking to consolidate. And the company isn’t the only mobile games studio making moves.

The publicly traded games studio Zynga, which rose to fame initially on the back of Facebook’s gaming platform, recently expanded its European footprint with the late-December acquisition of the Helsinki-based gaming studio Small Giant Games.

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