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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.

Roblox #1 Spending Choice for Kids

Children increasing digital spend, Scopely raises at a $3.3B valuation

Children Spending Habits Have Shifted to Digital

Trends in children’s spending habits have dramatically changed in the last year with a shift towards online games due to COVID-19 and lockdowns. According to RoosterMoney, the allowance and chores app, the top 5 things to spend allowance on in Q2 2020 were Roblox, Fortnite, Lego, Minecraft, and Gifts. Roblox had already trended to the top of the list in Q1 2020, when it was the only video gaming company in the top five, but now three of the top five are video gaming companies.

In 2019, kids were more focused on physical goods in regards to their spending. The top five consisted of Books & Magazines, Gifts, Candy, Roblox, and Lego. Due to lockdowns, kids are at home more and are clearly looking for more ways to socialize with their friends. Last year they were seeing their friends regularly and felt less of a need to be online. Now they have shifted their time to virtual worlds where not only can they play games with their friends, they can interact, socialize, and spend.

To understand how quickly this transition happened, you can look at the growth of Roblox. It took Roblox 13 years to reach 100M MAUs in August of 2019, but it quickly grew to 150M MAUs 11 months later by July, 2020. With this growth, overwhelmingly amongst kids, spending has also followed. Fortnite, the #2 choice for allowance spending, surpassed 350M registered users in May 2020 (The Verge).

Takeaway: a shift in spending away from physical goods towards virtual items is here to stay. Yes, COVID has fueled this transition, yet it merely accelerated what was already underway.

Scopely Raises $340M at a $3.3B valuation

Scopely has become a behemoth in the mobile gaming space. Even though the company was initially founded on free-to-play social games, their most successful games now tend to be focused on popular IP with games like The Walking Dead, Star Trek Fleet Command, WWE Champions, and Looney Tunes: World of Mayhem. Earlier this year, they acquired Marvel Strike Force through their acquisition of FoxNext Games from Disney (VentureBeat) for an estimated $250M. Scopely’s players are spending up to 80 minutes per day in some of their games (TechCrunch).

This round of funding came at a valuation of $3.3B and could be a precursor to either more M&A or just bolstering their current portfolio before the company explores a public offering in 2021. This latest $3.3B valuation is up meaningfully from their last round seven months ago when they raised $200M at a $1.9B valuation (Crunchbase). According to Walter Driver (co-CEO), the company is already a profitable business and in June of 2019 they surpassed $1B (Forbes) in lifetime revenue since their launch in 2011.

Takeaway: Scopely is one of the most iconic and well known mobile games companies in the world. Scopely is likely preparing for further M&A alongside a public offering in 2021, which we think will be very successful.