Gaming startup Lootcakes raises $2m to expand rewarded data sharing for VIP gamers

Gaming startup Lootcakes raises $2m to expand rewarded data sharing for VIP gamers

Published: 21-08-2020 11:58:00 | By: Pie Kamau | hits: 4976 | Tags:

Lootcakes, world's first network devoted to spenders in free-to-play games, announced the closing of a $2 million seed round led by Konvoy Ventures, with other participants including SOSV and GAN Ventures.

Lootcakes seeks to unite and empower the players who spend money in free-to-play games, an $88 billion global market in which only one percent of a game's players typically account for 80% of in app purchase revenue. Members of Lootcakes opt-in to share their in app purchase receipts, self identifying their unique gaming preferences and buying behavior. In return, for every dollar they spend on any free-to-play game distributed via the App Store, Google Play or Steam, members receive "lootcakes," the company's virtual currency. This currency is redeemable for gift cards to major gaming platforms, giving members more virtual goods in their favorite games. Members can also multiply their rewards by making purchases in promoted games and by participating in game-specific social groups.

Matt Littin, Lootcakes Co-Founder and CEO said: "With data breaches and misuse having sadly become regular news, consumers have never been more aware of their data's value. Lootcakes aims to be the leader of a new data paradigm we call 'rewarded data-sharing', in which consumers actively harness their data to get more of what they love, instead of passively giving it away." 

Lootcakes' approach to rewarded data sharing is resonating strongly with the type of VIP gamers who drive the bulk of the industry's in app purchase revenue. Spenders in Lootcakes' community spend over $170 per month on free-to-play games, with the top one percent spending over $2,000 per month.

The company's $2 million seed round was led by Konvoy Ventures, an early stage video gaming focused venture capital fund. Jason Chapman, Konvoy Ventures Managing Partner, said: "At Konvoy, our investment focus is to support founders with the pursuit of improving the gaming industry. Lootcakes' ability to help players recapture the value of their spending data is what resonated with our team. We have a simple belief that if it is your data, you should benefit from it. We are excited to support Matt and the rest of the team as they continue to reward more players and launch in new geographies.'' Chapman has also joined the company's board of directors.

Earlier investors in Lootcakes include SOSV (the funder of Lootcakes attended Chinaccelerator), Animoca Brands (blockchain and mobile games developer and publisher) and Haflo AB (family fund of Martin Hauge, former GP of Creandum, an early investor in Spotify). New funds will be used to develop and release a Lootcakes consumer mobile app to sit alongside its current web-based service. In addition, the company plans to open its private beta to more gamers, expand beyond the U.S. market, offer limited edition merch and virtual goods, and forge affiliate partnerships with YouTubers, streamers and game communities.

Lootcakes funds its member rewards and generates revenue by helping game publishers with VIP user acquisition. The company's first B2B service leverages Lootcakes' exclusive dataset to create large-scale spender lookalike audiences. In 2019, game publishers spent over $10 million on ads targeting Lootcakes' lookalike audiences, and in 2020 they're on pace to spend $25 million. Lootcakes is currently working on eight titles ranked within the U.S. top 100 grossing games on the App Store and/or Google Play. The company is already profitable.

The company's senior team includes Littin, former co-founding member of entertainment consultancy Cinetic Media, alongside President and COO Dan Laughlin and Co-Founder and CTO David Schleupner. Laughlin is a 15 year games industry veteran whose previous stints include Xbox, Flurry (acquired by Yahoo!) and mobile ad network HyprMX (acquired by Advantage Solutions). Schleupner was previously Co-Founder and CTO of Wisdomnet (acquired by Willis Towers Watson), an HR software company with clients such as MGM.