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Konvoy Ventures is a thesis driven venture capital firm focused on the video gaming industry. We invest in infrastructure technology, tools, and platforms.

Our Investment in Lootcakes

Konvoy's investment in Lootcakes, consumer spending growth, record mobile app revenue, Discord expands user base

Lootcakes: Our Investment in Rewarded Data Sharing for Mobile

In mobile free-to-play games, approximately 80% of in-app purchases are driven by 1% of the players. The 1% are the coveted “whales”, the big spenders, which game studios and publishers spend a significant amount of time and resources trying to find.  

According to Appsflyer, over $13B a year is spent on mobile game user acquisition. The majority of this advertising spend is on ad/social networks which have zero user purchasing data, ultimately leading to wasted advertising spend. This wasted advertising spend is what led the Lootcakes team to build a rewarded data-sharing platform which allows the mobile “whales” to automatically share their receipts for cash-back rewards.

Lootcakes uses their users’ purchasing history to help user acquisition teams at mobile studios. In the near future, Lootcakes will also allow direct marketing to their users on their own platform. We led Lootcakes’ $2M seed round and are excited to support the company going forward.

Consumer Spending: Highest y/y Increase in Video Gaming

Consumers are choosing to dramatically increase their spending on video gaming. While some of the other entertainment categories are not even allowed at this time (i.e. movie theaters, events, retail), it’s interesting to see how much further ahead gaming is from allowed activities like video streaming, e-books, and social media.

Video gaming has already been growing quickly (without COVID), yet right now it is rapidly expanding. With this expansion comes the simultaneous dismantling of the stigma around video gaming.

This remains one of the most social activities on the planet and I’m glad to see the masses coming to that same realization.  

Record Revenue Month for Gaming Mobile Apps

March 2020 proved to be a monumental month for gaming. According to Apptopia, the mobile gaming revenue for Twitch ($8.2M), Discord ($890k) Mixer ($360k), and Caffeine ($3k) all posted their best month in terms of revenue ever (mobile only). With more people being home and unable to find entertainment outside of the confines of their home, they turned to gaming and gaming-related entertainment.

Discord at 335K Downloads Per Day in March

Discord and Caffeine also posted a record month for the number of downloads, with 10.4M (335k per day) and 674k, respectively. Discord is typically valued based on its users since it generates very little revenue. In 2018, Discord was valued at $2B in its last fundraising round and Caffeine raised $100M that same year, led by 21st Century Fox.

To put March in perspective, Discord was averaging 5.3M new users per month since its initial release in May 2015 up until May 2019, or 173.3k users a day. In March alone, their monthly user growth was 196% higher than its average.