Last week, Mark Zuckerberg was roundly mocked for the bad graphics in his preview of a new expansion of Horizon Worlds, Meta’s metaverse effort. His quick response promising better avatars for the actual launch speaks to just how much appearances do matter in these situations. Now, in a spot of perfect timing, a startup out of Talinn, Estonia, called Ready Player Me — which has built a popular platform for creating dynamic, animated avatars to use across virtual worlds built and operated by others — is announcing $56 million in funding to grow its business.

The company today handles about 5 million avatars from across some 3,000 partners, and the funding will be used in three basic areas: to continue hiring (the company has offices in NYC); to expand the platform with more developer tools, including those for monetization, and to build more services for creators using Ready Player Me (it offers both an SDK and API); and to double down on the idea that creating single avatars, and identities, that are interoperable and can be used across multiple virtual environments will improve overall user experience, and thus help grow user numbers.

“Our bigger vision is to connect the metaverse through avatars,” said Timmu Toke, co-founder and CEO, Ready Player Me, in an interview. “There may be metaverse [experiences] owned by big companies, who will make all the rules, but there is a vision of an open one where people can travel, built by millions of developers, where no one controls the whole thing. Like the internet. We’re trying to push the world towards that metaverse.”

The Series B is being led by Andreessen Horowitz, the storied VC that has in recent times doubled down on all things web3, including metaverse technology; and it is being joined by a longer list of equally big names. David Baszucki, co-founder of Roblox; Justin Kan, co-founder of Twitch; Sebastian Knutsson & Riccardo Zacconi, King Games co-founders; sports and entertainment company Endeavor; Kevin Hart and Hartbeat Ventures; the TikTok-y D’Amelio family; Punk6529; Snowfro; Collab Currency; Plural; Konvoy Ventures; Robin Chan, co-founder of Fractal; and others are also participating.

Ready Player Me isn’t disclosing a valuation — Toke said “it’s good” — but the round is coming swiftly on the heels of the company’s last round, a Series A of $13 million earlier this year in January in a round led by Taavet + Sten (a VC led by Taavet Hinrikus former of Wise/TransferWise and Sten Tamkivi, formerly of Teleport and once an EIR at a16z; it’s also in this Series B).

Between then and now, Ready Player Me has been growing like a weed. The over 3,000 partners that it works with is more than triple the number it had in January (when the number was around 900).

That number says something about the fragmentation in the space at the moment — and something about how long-tail the audience is right now, too — two reasons why having companies building services that work across all of these different walled gardens makes some sense.

Whether that concept will have staying power over time — for example if we start to see some consolidation and concentration of audiences, or if bigger players (like Meta) want to take the creation and control of avatars into their own hands — remains to be seen. That is definitely one potential gating factor for startups like this one. Or, potentially, an opportunity: it makes a company like Ready Player Me an acquisition target for those hoping to be the single more powerful platform extending across the metaverse; but it also gives the startup some potential strategic impetus to grow and become that platform itself.

In support of the latter route, Ready Player Me says that its tech was eight years in the making: the company was hatched out of Wolf3D,  which worked with companies like Tencent, Verizon, HTC and Wargaming to build them custom avatar systems.

That work led to the company aggregating a proprietary database of more than 20,000 face scans, created using the company’s own 3D scanners. That database was used in turn used to build a deep-learning-based platform, which can produce real-time animated avatars not unlike the Animojis you get on Apple’s iOS, except that with Ready Player Me, the animated avatars are created to “accurately predict and render realistic faces from a single 2D photo,” which can be used on desktop, web, and mobile. It can also work off 3D images.

(Wolf3D still has a site as you can see from the link above, although the site hasn’t been updated since 2021, when Ready Player Me was unveiled. Toke told me it is a great lead generator so it’s kept it up, but that enterprise/B2B business has been rolled up for now.

These days, Ready Player Me’s partners span both web3 and web2 environments, and they include VRChat, Spatial, Somnium Space, RTFKT, said the company. The startup said it works with creators and fashion brands — customers include Adidas, New Balance, Dior, Pull&Bear, and Warner Brothers — to help them build cross-game avatar “assets” across the metaverse. The partners are the ones building platforms, or games and other experiences within those other platforms; and so part of what Ready Player Me also offers is a chance for its network of partners to integrate their avatars into those other experiences.

“Our core target today is the midsized gaming company rather than the big companies. We talk with Meta and others too,” Toke said, “but we think that the bigger will grow rapidly and so it makes sense to work with them first.” He noted that a lot of its partners “are still building experiences so a big part of the network is still not activated, and there is a lot more growth to come.”

The idea of building a platform to create avatars that work across multiple environments is central to how a lot of proponents of web3 think the whole effort will become more viable in the long term. Some of the big issues in metaverse business models up to now have been accessibility and user experience — in effect, you have to buy into device ownership and it’s all a little on the clumsy side to use, really aimed more at early adopters willing to take on that baggage than the mass market — so creating at least one piece of tech to make it easier to port one’s identity from one virtual world to another — complete with a single user ID — removes one of the obstacles.

“Ready Player Me is loved by both developers and players as the largest platform for avatar-systems-as-a-service, and is well on their way to building the interoperable identity protocol for the open Metaverse,” said Jonathan Lai, a general partner at Andreessen Horowitz, in a statement. “We’ve been deeply impressed by the team’s blend of developer empathy, technical chops, and entrepreneurial pragmatism, and couldn’t be more excited to partner with them on this journey.”

Incredibuild, an Israeli startup that has picked up a lot of traction in the worlds of gaming and software development for a platform that drastically speeds up (and reduces the cost of) the shipment of code and related collateral during building and testing — has raised some capital to speed up its own development. The company has picked up $35 million in a Series B round of funding — money that it will be using for product development, as well as to strengthen its ecosystem with more investment into community, developer relations and cloud programs across more markets.

This all-equity round is being led by Hiro Capital, with past backer Insight Partners also participating. We understand from sources close to the startup that the money is coming with a doubling of its valuation: when Incredibuild last raised funds — $140 million in March 2021 led by Insight, which took a big stake in the company at the time — it was at a valuation of $300 to $400 million. The company has doubled its ARR in the last year, and although it doesn’t disclose the actual figure, this round likely puts its current valuation at close to $800 million.

If it sounds odd that a Series B would be so much smaller than the Series A, that’s in part because that previous round was a mix of debt and equity: the company had raised very little since being founded in 2000 and was profitable.

These more recent rounds have been to give the business — which counts companies like Epic, EA, Nintendo, Sony, Microsoft, Adobe and Citibank among its 1,000 customers — capital to build new products on top of those that were already doing well. (Hiro is a VC that focuses on gaming, creator platforms and metaverse technology; and so it can potentially help on that front.)

One example of how Incredibuild has been evolving its product is the company’s deeper move into the cloud. Incredibuild’s first iterations, and still one of the biggest use-cases, were aimed at helping organizations distribute compute across their own on-premise machines.

In a concept not unlike (but not exactly like) peer-to-peer networking, the idea is that there is idle CPU in organizations’ network at any given time, and so Incredibuild has built a way both to identify those idle gaps, and to effectively divide up heavy code and distribute it to run across those CPUs in real time, and to then be reintegrated at a final end point. Over time, that also incorporated cloud compute.

“It’s a flavor of grid computing,” Tami Mazel Shachar, the CEO, in an interview, “but the secret sauce is Incredibuild’s approach to parallelization and virtualization. Nothing needs to be installed on the remote computer.”

And most recently, in the last year, following what some of its customers are doing, it has made an even deeper move into cloud: it has now inked partnerships with AWS and Microsoft integrating the Incredibuild tech directly into gaming stacks run in those companies’ respective cloud platforms, the idea being that using many pieces of small compute in the cloud simultaneously works out to be cheaper and now faster than simply running a process over a platform’s biggest single compute platform. 

“If I have a heavy process, millions of lines of code, that would take a 64-core machine to process, it’s considered expensive and will run 10 hours,” said Shachar. “But if I take 400 4-core machines and run that for five minutes it is cheaper, shorter and running in less time.”

She added that it has yet to provide tools to companies to run compute over different cloud providers, and has yet to build a similar deep integration with Google’s cloud platform: the demand from customers for either of those use cases is not there (not yet, at least).

And although cloud is growing in use, the real story still seems to be a lot of motivation to get the most out of on-premise equipment.

“Most of our users are on-prem and then burst to cloud when they have a peak or need,” she said.

The bigger picture for why Incredibuild has been growing well is because its product addresses three key factors in the market today, Shachar said.

The first is that, if you believe that “the metaverse” is more than just a marketing concept, it will require significantly more compute power, and as many organizations are coming to realize, the solution to that will not rely on hardware alone, but also software that can intelligently optimize the usage of existing hardware.

That is related to the second factor, which is that it’s going to be hard to continue relying on hardware because of the chip shortage.

The third factor is that the growing drive for more media-heavy code and more digitized services overall is seeing a massive strain in terms of human capital: there are not enough software developers out there. That is driving a market for more software automation, to take out some of the busy work.

Interestingly, the other big theme in distributed computing has been the big push around decentralization in finance, specifically in areas like cryptocurrency. This is not something that Incredibuild has really touched yet, but I asked if its cheaper and more efficient approach to distribution could ever be applied there, given what a bad rap crypto mining has had for the energy and other resources that it consumes.

“The idea of crypto has been looked at,” Shachar said. “It’s not in our near future, but definitely an option. It’s a question of focus.”

The fact that its focus so far has gotten Incredibuild to a pretty good place as a startup and cash-generating business is an indication that it could well be on the right track.

“Games companies are feeling the squeeze in developer capacity. Incredibuild gives developers back precious time by accelerating build compilation,” said Cherry Freeman, co-funding partner at Hiro Capital, in a statement. “Amazing games companies like Tencent, Take Two, EA, Konami, Nintendo, Capcom, and WB Games are already reaping the benefits of Incredibuild and our hope is that more companies will discover and take advantage of their brilliant technology. As always, Games are the cutting edge for technological advancement, and we envisage a future where Incredibuild will be the de facto distributed supercomputer on every machine in every company.”

Mass transit has made a rebound with the return of city life post-Covid 19, and today a startup that’s building tech to help it run more smoothly is announcing a big round of funding to meet the rush. Optibus, which uses AI to help public transportation bodies and their mass transit partners plan and operate their networks, has raised $100 million, funding that it will be using to continue expanding its product set and wider business footprint, CEO and co-founder Amos Haggiag said in an interview in London this week.

The Series D funding values Optibus at $1.3 billion, which the Israeli startup says makes it the first “unicorn” in the public transportation tech space.

Insight Partners, Bessemer Venture Partners, Verizon Ventures, Pitango First & Pitango Growth, Tencent, SOMV Momentum are among the investors in this round, which is brings the total raised by the startup to $260 million and is coming about 14 months after Optibus raised $107 million in a Series C at a $400 million – $500 million valuation.

That’s a big leap, but in a period where a lot of growth-stage startups have found it a challenge to raise more money, Optibus stands out as an example of how the right mix of timing and traction can still close deals.

The company now has customers in over 1,000 cities, double the number of a year ago; and its employees have also grown to 300 (up from 120). In total, Optibus is being used to track and power about 2.5 billion trips on buses, on-street trams, light rails and subways annually around the globe. (Note: in the public transport push for more multi-modal options for users, Optibus also incorporates data about public bike, scooter and taxi access points but doesn’t provide data about their movements — not now, at least.)

Optibus’s rise underscores to a critical moment for the world of public transportation.

Mass transit services like buses and subways took a huge hit in the last couple of years, with numbers of users declining by some 80% globally in the wake of Covid-19: people stayed home more to work; when they did go out, they generally wanted to avoid contact with others and crowds so stayed off public transport; and public transport organizations themselves also reduced services and passenger flow to fit with public health rules.

That has largely come back now, with average numbers now at 80-90% of where they were pre-Covid, Haggiag said. But that’s not the full story.

Even before Covid-19 hit, he added, mass transportation use was seeing a general decline in a number of cities as people were choosing to walk, bike, and scoot — or order rides from the new wave of e-hailing taxi-type services — alongside the ever-popular option of using their own cars.

But at the same time, he added, cities are growing, with the concept of “mega city” becoming more common and… more mega, and that is playing out in a surge for needing more mass transit.

“By far one of the biggest demographic changes in our time and in history will be the mega city,” Haggiag said. “We’re not talking hundreds or thousands or even millions more people in in cities, but billions.”

So while Optibus is often parachuted into already-established public transportation systems — where “Everything is old tech, or just no tech at all,” in Haggiag’s estimation — it is also finding a new wave of greenfield projects in emerging markets where the mega city trend is really surging. In one example, it’s working with Kampala in Uganda to build a new bus system from scratch, he said.

This is playing into how Optibus itself is growing as a business.

The startup first made its name by way of its AI-based planning tools — used to help transportation organizations ascertain how best to manage mass transit resources against rush hours, slow periods, social distancing rules and more, which they in turn also used to share data with to customer-facing services like real-time, third-party navigation apps.

Now, Optibus is moving into a wider set of features. These include, most recently, a new analytics engine, called Ridership Insights that provides more granular data based on routes, including boarding and alighting data based on time and date, to make more informed planning decisions.

And, coming in June, it will be launching an operations stack that will give its customers an end-to-end platform for people management, and to provide real-time data and services to their drivers and other employees. This potentially will expand to include systems that replace the radio systems that bus drivers use to get updates on, say, a sudden traffic change due to an accident on the route.

Optibus is building a lot from the ground up, but it has also been snapping up smaller transport startups to bolt on new tech and services. Last month, it announced the acquisition of Portland, Oregon-based Trillium, which it acquired for around $10 million. To complement Optibus’s existing B2B platform, Trillium has built tech to provide data to passengers, used both to populate more accurate data in third-party navigation apps but also potentially for transportation operators to build and provide their own apps, by way of a white-label service.

“Transport agencies understand that most of the world uses apps like Google Maps so the first focus is to make sure that the data is super accurate for those,” Amos Haggiag. But building their own apps is a no-brainer, a way to provide more direct information and to glean more data about their customers and their usage, to sell tickets directly and more. “There is a chance to show all of that more immediately in apps,” he added.

In terms of competitors, Haggiag said that there are a number of localized players providing parts of the “tech stack” — if you could call it that — services to help monitor traffic and send out messaging to users, and ERP and CRM systems that are used by organizations but do not join up with the data showing now networks really work. Joining all of that up together is what seems to be attracting the customers.

“Optibus combines innovation and public transportation expertise like no one else in the industry. Their software is revolutionizing our business and day-to-day operations, as well as the passenger experience. Optibus is the future of public transportation and we celebrate this fantastic milestone with them,” said Carla Stockton-Jones, UK MD at Stagecoach Group, the largest public transport operator in the UK, in a statement.

“Optibus has modernized the industry and helped cities around the world bring quality and reliable transportation to their residents. As long-time investors in the company, we’re excited to continue our partnership with Amos and the team,” said Teddie Wardi, MD at Insight Partners in a statement. “We look forward to working with Optibus as they continue to grow and scale up.”

“For SOMV Momentum, Optibus represents everything that is great in tech; digitizing and disrupting the basic functions of society in a way that serves the common good, both in quality of service and environmental impact, whilst also being an island of solid growth, which is of prime importance for us in current market conditions,” added Merav Rotem Naaman, general partner at SOMV Momentum. “We are very proud to be continuing this journey with Amos and his amazing team.”

PayU, the fintech business controlled by Prosus with operations in 50+ countries — it’s been described as the PayPal of emerging markets — announced a double-deal today to expand its presence in Latin America. The company has acquired Ding, a platform that lets people top up mobile phone credits for others remotely; and it has led a $46 million investment in to Treinta, a financial “superapp” aimed at small businesses. Ding has 300,000 monthly active users transferring about $10 million per month; and Y Combinator alum Treinta, which launched only 18 months ago, has 4 million customers.

Notably, both are based in Colombia but provide services across the Latin America region (and in the case of Ding, globally). For PayU and Prosus, the deals are significant for two main reasons:

First, they are helping Prosus tap into what continues to be a fast-growing market. The company quotes figures from the U.S. Department of Commerce that estimate Colombia alone to have the fifth largest e-commerce market in Latin America, which as a region is projected to reach 260.2 million digital shoppers by the end of 2022, overtaking the U.S., with $167.81 billion in purchases.

Second, the move speaks to how PayU and Prosus are looking to add more diversification to its investment base. It’s a development that’s interesting considering its proximity to Prosus rethinking investments in other regions, specifically the currently-pariah state of Russia, including a $770 million write-down in March of its investment in social network VK.

“Our recent activity in Colombia reflects PayU‘s desire to provide seamless online and cross-border transactions for merchants and consumers,” said Mario Shiliashki, Global CEO of PayU‘s payments division, in a statement. “These are just two examples of how we are providing useful products and services to millions of people in their daily lives. PayU has helped to facilitate the evolution of online payments in Colombia since 2011 and we are proud to be extending our services to promote financial inclusion for SMEs in both Colombia and globally.”

Digging into the individual deals, Ding is the operating name of Tecnipagos, which itself was a spinoff from CredibanCo, a payment services provider in the country that has been around for 50 years. It looks like Ding had never had any outside funding prior to getting spun out and scooped up.

The financial terms of the Ding acquisition — was first reported earlier this month, before it closed — are not being made public, but they may be in future financial statements from Prosus. Prosus itself was listed in 2019 by South African multimedia conglomerate Naspers as a separate, public company that contained all of the company’s tech businesses, which includes PayU and other e-commerce and fintech investments, as well as a significant holding in China’s Tencent. Prosus has a current market cap of $152 billion — a figure largely boosted by that Tencent stake.

For some context on the size of what PayU is acquiring, Ding claims to have some 300,000 monthly active users and makes 30,000 transfers daily totaling some $10 million processed each month.

PayU describes Ding as a payments app, but its focus has squarely up to now been transfers for a single purpose: topping up credit for mobile phones. This in itself is a significant business, and often one that goes hand-in-hand with more general remittance services. Mobile phone credits are used for more than just making calls in emerging markets (the phones become a proxy for bank accounts in many developing markets where traditional banking services are expensive or underdeveloped). Oftentimes money that is sent from friends or family comes in the form of mobile credits. This paves the way for PayU to develop more remittance services around Ding, and potentially extend its existing remittance operations to Ding’s customer base.

The Treinta investment, meanwhile, is a $46 million round along with participation also from LionTree Partners, Ethos VC, TEN13, and other undisclosed investors. Treinta had previously participated in a Y Combinator batch, and backers of the company in its $14.3 million in seed round in 2021 included YC, Levels Up Ventures, Outbound Ventures, Luxor Capital, Mango.vc, Goodwater Capital, Soma Capital, First Check Venture, Houston Angel Network, FJ Labs, Commerce Ventures, Rhombuz Ventures, Acacia Venture Partners and Evening Fund.

Treinta — which means “thirty” in Spanish — is not disclosing its valuation, and PayU also declined to comment on the figure.

The startup has only been around for 18 months and it says that it already has some 4 million SMB customers in 18 countries.

Treinta itself is tapping two trends that are big in fintech at the moment. The first involves a wave of fintech businesses building “all in one” platforms, where customers might come for one specific service — financing, or invoicing, or current account services, for example — and are being upsold to related offerings, which themselves are build around a wider dataset that the fintech is building about that particular customer. These services often bring in technology behind the scenes from third parties, using APIs to embed those white-label products and brand them as their own.

The second is Treinta’s focus on small businesses — a cornerstone of the global economy, yet one that has been traditionally underserved by technology. Treinta estimates that there are some 50 million small businesses (it describes them as “microenterprises”) in Latin America, with some 90% of them yet to adopt any kind of tech at all to manage their finances, so it’s a large potential market.

PayU, as a provider and builder of fintech solutions, will be able to leverage Treinta as a channel for getting its own customer-facing tech deeper into the market in Colombia and the rest of Latin America, but Treinta will also become another retail channel for PayU’s under-the-hood technology.

“By acquiring and investing in businesses like Ding and Treinta, both global and local SMEs are able to expand their business within LatAm, providing the best payments service with the consumer experience first in mind,” said Francisco León, PayU‘s CEO for Latin America, in a statement. “We are very excited to expand the reach of Treinta and Ding’s innovative solutions, particularly as these services are fully aligned with our strategic goal of creating a world without financial borders.”

While a lot of PayU’s activity has been in Asia and emerging markets in Europe, Latin America will be a big focus in coming months it seems. A spokesperson tells us that PayU plans to make further investments in the region this year.

Since the Ant Group IPO was canceled by central authorities, China’s government has been on a regulatory tear.

You know the broad outlines: After a lengthy period of growth, capital investment and aggressive business practices, China’s central government spent much of 2021 reining in its technology sector. While some of the actions were reasonable from an antitrust perspective, many of the changes to the country’s tech sector appeared more punitive toward entities viewed as too powerful.

The for-profit edtech sector got hit. Didi was effectively executed after it had the audacity to go public in the United States. Video game time for kids was cut, gaming titles left unapproved, algorithms put under the microscope, and more. The business climate for building tech companies under the new “Common Prosperity” push in the country appeared to take a dramatic turn for the worse.

As a result of the changes, the value of many well-known Chinese technology companies suffered.

Although the exit window for China-built tech companies is seemingly constricting to only domestic exchanges, and the space made available in the economy for tech companies to build and innovate apparently shrinking, venture capital activity was strong last year in the country.

We were surprised to see it as 2021 entered its final months, just as we were surprised when we got the full-year numbers.

But there was more. ByteDance recently “dissolved its strategic investment team, sending worrying messages to other internet giants that have expanded aggressively by investing in other companies,” TechCrunch reported. Why did TikTok’s parent company do so? We explained:

At the beginning of this year, ByteDance reviewed its “businesses’ needs” and decided to “reduce investments in areas that are not key business focuses,” a company spokesperson said in a statement. …

The “restructuring” still stirred up a wave of panic in the industry. China’s cyberspace regulator has drafted new guidelines that will require its “internet behemoths” to get its approval before undertaking any investments or fundraisings, Reuters reported. Some Chinese media outlets reported similar drafted rules.

Hot damn.

Obviously, we’re still sorting out precisely what is going on, but it appears that the ability of large Chinese tech companies to deploy capital at will into smaller companies is rapidly coming to a close.

From this juncture, our question is simple: Will government regulations slowing Big Tech investments into smaller companies in China shake up its larger venture capital market? Let’s talk about it.

Tracking corporate venture capital investment in China

The answer to our question is yes, but perhaps not lethally.

Tracking just how important corporate venture capital is to the Chinese VC scene is an interesting problem to crack. One way to view the data is to look at the list of most active investors in private Chinese tech companies in the last year.

Krafton, the developer behind PlayUnknown’s Battlegrounds,” and the maker of PUBG MOBILE, last year’s No. 6 top-grossing mobile game on a global basis, is suing the app stores and a rival game maker, Garena, over copyright infringement involving Garena Online’s Free Fire games. The lawsuit alleges Garena’s games copy numerous aspects of its own, including its opening, its game structure and play, the combination and selection of weapons, armor and unique objects, locations, and the overall color schemes, materials and textures.

Google’s YouTube is also named in the lawsuit for hosting videos of the infringing material.

According to the complaint, Garena started selling a game in Singapore that copied aspects of Krafton’s game, shortly after Battlegrounds’ launch in 2017. Apple and Google began selling a mobile version of this game, which was originally called Free Fire: Battlegrounds and is now called Free Fire. The Singapore claims were settled between the two companies, but Krafton never entered into a licensing agreement with Garena, the filing states.

Then, on 28 September 2021, Garena released a new title called Free Fire MAX, which is a separate mobile game distributed on Apple and Google’s app stores. This game is meant to offer the same user experience as Free Fire, Krafton says, and it also infringes on numerous aspects of Battlegrounds. The company noted the infringing game has gone on to earn “hundreds of millions of dollars” from its global sales. Apple and Google similarly profited, as they take commissions from games distributed through their app store platforms.

Meanwhile, Krafton named YouTube in the lawsuit because it hosts videos of Free Fire and Free Fire MAX gameplay. The videos have been viewed hundreds of millions of times, or in some cases, more than a million times. YouTube also hosts a feature-length live-action film that’s an infringing dramatization of Battlegrounds, the claim states.

Krafton says it’s turning to courts to resolve the matter because Apple and Google have not done so. It said it asked the app stores to stop distributing the game on Dec. 21, 2021, but they refused. YouTube also won’t take down the infringing videos.

The lawsuit comes shortly after the Nov. launch of Krafton’s follow-up title, PUBG: New State, which contains a number of new elements. The company is likely worried that its latest release will be copied, too, if this issue is not resolved.

Clones of popular apps and games have been a common problem on app stores, and the growth of the subscription market has made the activity even more popular. Just this week, in fact, Apple had to clear out clones of a popular online games Wordle, for example. Apple is also facing a lawsuit from another developer who lost money to clone apps. Like Wordle, other viral games in years past, like Threes and Flappy Bird, have faced clones, too. But in many cases, the games are simpler, easier to copy, and faded from popularity faster. For games like PUBG Mobile, however, the financial impact of clones is at a much larger scale.

The lawsuit was filed in the U.S. District Court for the Central District of California on Jan. 10, 2022. Krafton is asking for a jury trial to resolve the matter.

Krafton has often defended its gaming empire, having more recently won a lawsuit against cheaters. PUBG also previously settled copyright claims with NetEase, also over PUBG clones, but dropped a similar suit with Epic Games over Fortnite in 2018.

Fresh from raising a $244 million Series C (that valued the company then $1.7 billion) back in June, K12 online tutoring marketplace GoStudent has now raised a $340 million Series D round led by new investor Prosus, an Amsterdam-based investment firm best known for investing in Latin American and US-based LatinX internet properties. GoStudent expanded to Mexico this year.

Also participating was Deutsche Telekom, SoftBank Vision Fund 2, Tencent, Dragoneer, Left Lane Capital and Coatue.

That makes $669M raised since GoStudent was founded in Vienna in 2016, giving it a notional $3.5BN / €3BN valuation.

In a statement, Felix Ohswald, Co-Founder and CEO of GoStudent said: “Education has seen a whirlwind of change, from remote classrooms to increased academic ambitions, and we believe there is a big opportunity to transform how students learn all over the world by expanding access to quality education.”

The new funding will be used for international expansion, product expansion through M&A, and increased market share in existing geographies, said the company.

Fahd Beg, COO, Prosus EdTech, said: “GoStudent has built a highly scalable business offering a superb customer experience. The company is creating a leading global platform for K12 education and the speed at which they are growing is impressive. We are living through a time when technology is transforming education globally and the inspiring vision of founders like Felix and Gregor will reshape how students learn in the future.”

In 2021, GoStudent expanded to 16 countries, including Canada and Mexico, and opened 19 international office locations.

The company said it plans to enter a “minimum” of six markets this year, including new regions such as the US, Asia-Pacific, and the MENA region; grow and diversify its range of services through M&A (it acquired the all-in-one school communication app Fox Education in September 2021), and invest in existing regions where tutoring services are “highly fragmented and traditionally offline”.

GoStudent is surfing a wave of interest in EdTech following the Covid-19 pandemic, which forced students into online learning, and subsequently became seen as a much more efficient way to get tutoring (as well as being Covid-safe). In addition to GoStudent, Kahoot!, the Norwegian gamified learning platform, is another European EdTech unicorn.

After an earlier period of experimentation with business models, GoStudent started to focus more squarely on one-to-one tutoring. It now lets students and their parents pick tutors for general tutoring or specifically with the aim of taking an exam. Tutors are tested, vetted, and interviewed by GoStudent before they can join the platform. That strategy and the pandemic have come together to create a perfect opportunity for the company – and any other EdTech startup.

With supply chains in the automotive industry continuing to be disrupted due to Covid-19, demand has surged in the used-car market. Today, one of the startups that’s seeing a lot of growth as a result of that is announcing a big round of funding to further tap the opportunity.

Cars24, a startup out of India that has built an app and website for selling used cars and motorbikes, has raised $400 million: a Series G of $300 million in equity and a further $100 million in debt. The fundraise is coming just three months after Cars24 last closed a round — $450 million, with $340 million as a Series F and a further $110 million in debt — and as a mark of how heated the market is right now, Cars24’s valuation has nearly doubled in that short time: it’s now $3.3 billion, versus $1.84 billion three months ago.

Alpha Wave Global (which co-led the last round under its previous brand, Falcon Edge Capital) is leading this Series G, with participation from other existing investors. Cars24 is not disclosing who those investors are, but other backers include DST Global, SoftBank Vision Fund 2, Alibaba, Tencent, Moore Strategic Ventures, Exor Seeds, Raptor Group and around 20 others.

Cars24 claims to have a 90% share of India’s used-car market, and it’s gotten there by way of technology. Its tools include a search engine for people to find vehicles (its wide inventory being one of the main unique selling points versus physical used-car lots); options for financing for the vehicle; and logistics software to subsequently organize and carry out vehicle deliveries to new owners. It also has built analytics to measure demand and calibrate pricing and make online assessments of vehicles. Cars24 currently has some 13 million monthly visitors to its site and has sold over 400,000 vehicles (both cars and motorbikes) to date.

Cars24 is not only on a scaling, but also a funding, tear: it additionally raised $200 million last December, putting the total raised in the last year to about $840 million. (And rumors of this latest round were circulating a couple of weeks ago.) It’s not the only one: a month ago, Spinny, another startup in the used-car space raised $280 million.

While Cars24 plans to work on increasing new customers against rival services, it will also be investing in more hooks to extend its engagement with those already using Cars24. These will include more financing options and centers for servicing vehicles before and after purchase. It will also be continuing to add more countries to its international footprint, with its next launches expected in Southeast Asia.

“The primary use of the funding will be to continue to strengthen our presence in India, and in the countries where we have expanded,” said Gajendra Jangid, Cars24’s CMO, who co-founded the company with Vikram Chopra (the CEO), Mehul Agrawal and Ruchit Agarwal in Gurugram in 2015. Cars24 is active in some 200 cities in India, and it claims to have grown 50% in the last quarter, a record for the company.

A number of outsized startups have emerged in India with massive coffers of funding to grow domestically, with little in the way of international strategy. And with nearly 1.4 billion people, the world’s second most populous country after China, you can see why. Cars24, however, has followed a different playbook, exporting its model to several countries in the last year, starting with the UAE (July 2021), and then Australia and Thailand (both in October). It plans to add to that list with its next markets in Southeast Asia, Jangid confirmed.

Launching in more developed markets like Australia and UAE has seen Cars24 adjusting its approach based on different market factors, he added.

“In Australia and the Emirates, it’s been about getting a good global supply of cars,” he said. “Because it’s hard to get new cars right now, that’s impacting pricing and demand for used vehicles.”

In its home market of India, car ownership still lingers in the single-percentage digits — somewhere between 2% and 3%, according to estimates — so in that regard, the only way is up. Indeed, as one of the most populated markets, which is rapidly developing, and which has jumped in with both feet into digital services and mobile apps, India represents a giant amount of potential that Cars24 is hoping to tap.

While Cars24 will continue to focus on bringing on new users, it’s also investing in infrastructure to extend how it works with those who are shopping on its platform. It has built out seven so-called Mega Refurbishment Labs around the country to assess and fix up cars destined for its platform. Sitting as a complement to the company’s otherwise all-digital approach to sourcing and selling vehicles, Jangid said the idea will be to make these labs a part of how the company also provides after-care to those who have purchased vehicles with the company. Longer term, he said, these would open up to all car owners. The company is also starting to build labs in other parts of the world to extend the proposition, with the first opening in Dubai.

The other area where the company is expanding its services is in the area of finance. Jangid said. He said Cars24 was the only player in its category with a banking license and it’s been using that to create payment schemes for customers. LIke car ownership itself, this represents another area of currently-underserved opportunity.

“Less than 20% of used cars get financed, while more than 80% of new cars sold are financed, so you can see the huge gap,” Jangid said. He said that currently, more than 50% of its customer base is financing vehicle purchases by way of Cars24.

It’s not all smooth sailing for the company. Working in used vehicles, there are a number of inconsistencies in product, and the more Cars24 scales the harder it will be to ensure a consistent customer experience around that, too. We’ve seen other used-car startups crash over similar issues, so it will be worth watching whether Cars24 manages to navigate these challenges as it scales. It’s one area where building out the physical servicing centers might help.

“We are excited to back Cars24 yet again as they continue to cement their leadership positions across India, UAE, Australia and other international markets,” said Navroz D. Udwadia, co-founder and partner of Alpha Wave, in a statement. “CARS24’s robust competitive moats across in-house reconditioning, access to the widest assortment/supply and deep data science drive a delightful customer experience, and reflects in its best-in-class NPS. We believe this investment will help CARS24 fortify its moats even further and scale 10x from here over the next few years. We remain impressed by the team’s vision and execution, and are delighted to deepen our partnership with CARS24.”

Didi’s U.S. IPO is one of several key moments of the recent regulatory shift inside China regarding its leading technology companies. The other is Ant’s IPO that never happened, pulled in the wake of criticisms of the Chinese government’s handling of newer technologies by the previously prominent Alibaba founder Jack Ma.

It’s been a busy year for changes to how the autocratic Chinese government handles its economy. From a larger crackdown on technology firms to new rules regarding youth video game playing, a shellacking of the for-profit edtech sector, and changes to how fintech can operate, watching China from a tech perspective this year has proved hectic.

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Even though it’s the first of December, we may not be done yet with this year’s changes.

Bloomberg reports that China is considering removing the VIE loophole that allowed Chinese companies to list in the United States, closing a method by which local companies could access foreign capital.

VIEs, or variable-interest entities, are complex. But legal group Winston & Strawn has a good summary of why they matter, which will do for our purposes. Per the law firm, VIEs are “commonly used in China to allow foreign investors to participate in industries that are explicitly or practically restricted from foreign investment.”

VIEs don’t grant ownership of the underlying asset as we might normally understand it. Instead, they can help get around Chinese laws concerning foreign ownership of companies in select industries. How do they do that? By using an offshore company setup to collect “a claim on the profits and control of the assets that belong” to the actual company in China, GCI Investors explains. That’s where the interest part of VIE comes into play.

VIEs are how Tencent, Didi and others went public in the United States. Not by listing their main corporate bulk, but instead by dodging domestic rules, creating a puppet entity, and selling Americans stock in that corporate bridge. Not what you expected? Did you think that your Alibaba holding was in the actual company? Well, bad news.

The model was always risky as heck, but tolerated because folks wanted to buy shares of Alibaba, as well as the general risk-on climate of the last few years. But now the Chinese Communist Party is considering doing away with the side-step of its own rules.

Data streams with continual, real-time updates of information are a critical building block of how apps and sites function today, and now a startup that has built a platform to power those data streams is announcing a growth round of funding on the back of strong growth in its business into a wider set of use cases. PubNub, which provides APIs to power messaging and data updates for apps and other digital businesses, has picked up $65 million, a Series E that the San Francisco-based startup will be using to continue expanding the functionality on its platform, as well as for geographical expansion: first up will be a new Asia Pacific office in Singapore.

PubNub tells me that its messaging, presence, and other data-based APIs today are used across some 600 million devices in more than 70 countries, with some 900,000 developer projects generating some 21 petabytes of data on a monthly basis. Its “thousands” of customers include the likes of Adobe, Atlassian, DocuSign and RingCentral. More widely, verticals where it is seeing strong traction include gaming, virtual events, enterprise collaboration, chat, rideshare/delivery services, telehealth applications, connected fitness, and smart home products — a range of areas that rely on the concept of “virtual spaces” where regularly updated streams of data — be it the progress of a delivery, or how many steps you’ve taken, how much energy you’ve used, or who is participating or chatting in an online meeting — are a core part of the user experience.

“We are seeing an explosion in what customers are doing using PubNub,” PubNub’s CEO and co-founder Todd Greene said in an interview. “From the time we started PubNub the vision was what software is needed to power virtual spaces. At first it was messaging, but over time we saw from customers that communication wasn’t enough.”

The funding is being led by Raine Group with others including Sapphire Ventures, Scale Ventures, HPE, and Bosch also participating. PubNub is not disclosing its valuation, but for some context, it has raised more than $130 million, and it was estimated by PitchBook to be valued at around $220 million in its last equity round in 2019.

I have confirmed with Greene that the San Francisco-based startup’s valuation now is “much higher” than that, although it’s hard to quantify PubNub’s growth since it has not disclosed how much data it has worked with on a monthly basis, just the number of messages — 1.3 trillion messages in 2019 — a figure it’s not updating this time around. It says that customer bookings have grown 200% year-over-year in 2021.

PubNub works very much behind the scenes — you will never see a “powered by PubNub” message come across your screen when its APIs are being used — but it is also working in what has become a central and critical part of how all digital services operate.

More and more aspects of our day-to-day lives are carried out, or dependent in some way, on digital experiences, and part of the reason why is because those digital experiences themselves have come a long way. Apps, sites and connected devices have more functionality, more data, and better user experience built into them than ever before, and so we use (and rely) on them more as a result. Unsurprisingly, those providing the infrastructure to make all that work as it should are seeing a boost of business growth and investor interest.

Added to all that, the “metaverse” has definitely picked up some hype as a concept in recent times, which might also give a push to companies that talk about powering virtual spaces as PubNub does, although the bigger picture is a little less buzzy and just how these services have evolved and operate already.

PubNub is not the only one seeing its star rise in that context. Others like Twilio, SendBird, MessageBird and Sinch also are providing API-based messaging and other communications services used by third-party apps, sites and other digital businesses. More directly competitive with PubNub are others providing API-based routes to build any kind of data updates, messaging or otherwise, that turn the wheels of any real-time services. They include Ably out of London, Techstars-incubated Cometchat, and Google’s Firebase.

Within that wider context, PubNub’s selling points have been its geographical reach with global points of presence, making it compliant with a variety of regional data protection rules including HIPAA, GDPR, and SOC 2 Type 2; and the fact that it is adding more functionality, both natively and by way of integrations with other services, all of which it lets developers control and monitor by way of a centralized dashboard. Services that it currently covers include in-app chat, geolocation, virtual events, push notifications and IoT services.

One might think that the current shift in digital culture towards less, not more, notifications overall might prove to be a challenging climate for the likes of PubNub. After all, information overload is not really a contested topic anymore, nor is the concept of apps draining your data or monitoring you all the time whether or not you are using them, even if how best to handle these issues, and whether the overall effects are bad or good, still may be. But Greene says that is not the case.

“Even back when we just did messaging, with the push notification feature, 99% of the messages were in-app. If you are ordering a car and watching it move on the screen, it’s effectively many messages [data pushes] coming to show you that. Companies like Apple and Google aren’t blocking that, so the shift with notifications hasn’t effected us at all,” he said, adding, “It has impacted in a positive way. In the past apps may have provided pushes to let you know something has happened. Now, they are not watching that anymore [by default] so now focusing on the in-app experience is more important.”

Lead investor Raine Group is an interesting backer for the startup as it continues to grow. The company is not just a prolific investor — but also counts a very extensive list of customers among those it advises, where it has been involved in a ton of M&A deals involving companies like Apple, Tencent, ByteDance, Warner Music, SoftBank, Uber and more. This opens the door for PubNub to leverage that network for business development and to make more customer inroads.

“We are excited to be partnering with PubNub, powering the future of real-time digital and social experiences in a world where constraints on developer time and engineering resources are placing an increasing demand for software solutions and APIs,” said, Christopher Donini, MD of The Raine Group, in a statement. “PubNub’s leading solution provides easy-to-implement reliability, security, and low-latency, which we believe solves a pervasive problem at the intersection of Raine’s global network across technology, media, and telecommunications.” Donini and managing partner Kevin Linker are joining PubNub’s board of directors with this round.

Berlin-based on-demand grocery delivery and dark store operator Gorillas has grabbed “close to” $1 billion in Series C funds, in the latest sign of the searing investor interest driving activity in urban food shopping apps across the continent and beyond.

The round is being led by another food-focused on-demand delivery startup — German’s Delivery Hero — which confirmed it’s invested $235M in Gorillas to grab around 8% of the upstart grocery delivery startup.

Gorillas already passed a unicorn valuation back in March this year, even though it was only founded last year. It’s now being valued at $2.1BN, pre-money — and touts the Series C as largest funding raise of a non-listed business in the European grocery delivery sector.

Commenting in a statement, Kağan Sümer, CEO and founder, said: “The size of today’s funding round by an extraordinary investment consortium underscores the tremendous market potential that lies ahead of us. With Delivery Hero, we have chosen a strong strategic support that is deeply rooted in the global delivery market, and is renowned for having unique experience in sustainably scaling a German company internationally. We have the best team in our sector, leading partners, and financial resources to strengthen our market-leading position in Europe and beyond.”

Also participating in the round — which comes just seven months after Gorillas bagged a $290M Series B — are existing investors Coatue Management, DST Global, Tencent, Atlantic Food Labs, Fifth Wall, Greenoaks, A*; along with new investors G Squared, Alanda Capital, Macquarie Capital, MSA Capital and Thrive Capital.

The startup operates a network of urban dark stores to fulfil orders for speedy grocery deliveries within the cities where it offers a service (it’s available in more than 55 cities at this point, including Amsterdam, London, Paris, Madrid, New York, Milan and Munich).

Since its founding in June 2020, Gorillas has scaled to operate more than 180 warehouses across its nine international markets, and says its last-mile couriers (who are employed, rather than gig workers) delivered more than 4.5 million orders in the past six months alone.

The company says it’s now entering a new phase of its business following the period of rapid international growth — which will focus on building a scalable and robust business infrastructure at the same time as trying to accelerate future growth.

Specifically it said the Series C will be used to bolster its footprint in existing markets while investing further into operations, people, technology, marketing and finance infrastructures — to ensure it stays focused on customer experience.

For its part, Gorllias’ lead investor for the round — Delivery Hero — said the investment underlines its own commitment to quick commerce (aka q-commerce) globally.

“Gorillas has been setting new standards for the delivery industry by offering an efficient and sustainable alternative to traditional grocers. We have been following their stellar growth over the past few months, and we are beyond excited to be now part of their journey. Both of our companies place a lot of value on creating a strong sense of community and we are convinced that our investment will positively impact employees, consumers as well as our industry,” said Niklas Östberg, CEO and co-founder of Delivery Hero in a supporting statement.

“Delivery Hero is on a mission to advance quick commerce globally and we see Gorillas as one of the leaders in Europe and the US,” he added. “The Gorillas team has an exceptional customer focus driving the highest retention rates we have seen in the industry. This has enabled them to reach over $300M revenue run-rate in only one year with continued double digit monthly revenue growth. We truly believe that investing in innovative q-commerce players will benefit the entire industry and set a new standard for what a great customer experience looks like.”

In the early pandemic, a few weeks before Gorillas was born, TechCrunch discussed the grocery delivery market with Östberg — who noted that it was seeing “a larger willingness” among its customer base to have more than hot meals delivered.

A year and a half later Europe’s landscape for on-demand delivery continues to be a highly volatile, high cash burn mix.

Other well-resourced local players in the convenience grocery space include the likes of Berlin-based Flink, Istanbul’s Getir, Barcelona’s Glovo and London’s Zapp, to name a few — with plenty more upstarts scrambling to join the fray.

US giant Gopuff is also actively trying to sew up the region, including by picking up local rivals.

After digging into the Rent the Runway IPO filing this morning, we’re turning to Udemy.

The Udemy offering comes in the wake of the successful Duolingo IPO earlier this year. And the company’s debut may prove to be the final major edtech IPO ahead of Byju’s eventual debut — how well Udemy performs in its public offering could impact others in its market, including some incredibly wealthy education technology players.

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So, how does the company’s growth profile appear after the pandemic-powered wave of demand for edtech has passed?

In the case of Udemy, we’re looking at an online learning service that raised north of $300 million while private. A $50 million Series F raised in late 2020 valued the company at a touch over $3.2 billion, per Crunchbase data.

For Lightbank, Insight Partners, Norwest Venture Partners, Mindrock Capital and Tencent, the company’s IPO is a material liquidity event; there’s lots of capital riding on its success.

The edtech company is an interesting two-part business, with one piece of its operations aimed at consumers and the second at businesses. To understand how healthy Udemy is or is not, we’ll have to dig into each half of its business model — we’ll also want to know what’s happening to the company’s aggregate revenue mix and which direction it’s leaning in recent quarters.

Sound like fun? I’m super stoked to get into this one. So, let’s:

Udemy’s business through the pandemic

From 2019 to 2020, Udemy grew from $276.3 million in revenue to $429.9 million, or 55.6%. That’s quite a lot for a company that has already reached material scale, or revenues of $100 million and above. More recently, in the first half of 2021, Udemy posted $250.6 million in total revenues, up 24.5% compared to H1 2020.

But we expected Udemy to grow more slowly after its pandemic bump, frankly, so to see the company’s revenue growth decline into 2021 is not a huge shock. How investors value a slower-growing — but larger and more profitable — edtech company will be interesting to watch.

Not that Udemy actually makes money. It does not. But it is losing less money over time:

Image Credits: Udemy S-1

If you want to get a net income number excluding the cost of share-based compensation, you can deduct $20.6 million from its H1 2020 number and $16.5 million from its H1 2021 figure. The latter calculation will get you down to less than $13 million in losses during the first half of 2021 at Udemy. That’s far closer to profitability than the company has managed in prior periods, indicating that Udemy enjoyed some operating leverage during the pandemic, cutting losses while its revenues expanded.

Revenue mix

We’re going to break our general rule of not including marketing-friendly charts in our S-1 teardowns for the following exception: