Mobile dominates the world of gaming, with smartphone and tablet games generating $93.2 billion in revenues in 2021, more than console ($50.4 billion) and PC ($36.7 billion) combined according to gaming market research firm Newzoo. And that’s before you consider the thousands of popular apps out there that are not strictly games but rely heavily on gaming mechanics to entice users.
Now, banking on the idea that both professional developers and more casual enthusiasts are going to want to build even more mobile games in the future, an Israeli startup called Kooply is announcing funding from key investors to build out a mobile games development platform.
The company is still in stealth mode — it hopes to have a soft launch later this year — but in the meantime it has picked up $18 million in a seed round co-led by Microsoft (via its M12 fund), TPY Capital, and Israeli mobile casino games giant Playtika — with Aleph Venture Partners, Capital Entry, Glilot Capital Partners and Samsung Next also participating. The money will be used for hiring, and to continue investing in R&D and building out Kooply’s platform ahead of its launch.
Kooply’s CEO Ido Yablonka — who co-founded the company with Vadim Zak and Guy Pitelko last year — would not get very specific about what the company is building when we talked about the seed funding the other day, instead talking about the challenge that they have identified and want to address.
That challenge is that while there are a lot of mobile games on the market already, a lot of them are not very good, either in how they are built, or how they meet what consumers want, or in how they are amplified in the world — or a combination of all three.
“When you look at the App Store and Google Play, more than 99% of the mobile games will have between 50 and 100 downloads,” he said. “For sure, most of them are not very good but 40% are adequate, 5% are very good, and the rest are okay. What you should infer from those numbers is that in terms of distribution and monetization, for the adequate, okay, and very good games it was never in the game, so to speak, to succeed. They were dead on arrival.”
This, he said, is because even with good ideas, that is only half the challenge to executing on them to make an attractive game, and then to get it in front of those who are most likely to love it — hard work in itself that needs its own expertise and access to the right tech. “We try to shorten that path for developers,” Yablonka said. “Our mission statement is that if you have a concept and know what [you want] to build, we take on the development, the assets and the distribution so that you can focus on that vision.”
This will, he said, bring the company both into the realm of tools for experienced developers but also those who are keen to build something but might lack those technical skills. He said initially the focus will be casual mobile games — an area that has seen a huge amount of activity in terms of M&A, startups raising big money to scale and stay independent, and most critically of all, massive audiences (more than 20 billion downloads projected for this year on revenues of over $19 billion).
There are a number of games development platforms already on the market or in development, with different takes on the level of expertise needed to build, and for which environment. Some of the more recent fundings include Yahaha — Chinese founders with studios in Finland as well, a no-code platform aimed at immersive gaming — announcing $50 million in funding; PortalOne — a hybrid and immersive platform that will start with its own games — which recently raised $60 million; and companies like Overwolf, which focus not on the games themselves but customizations within them; and of course a number of platforms for building mobile games such as Unity, Unreal Engine and more.
Yablonka believes that there is an opportunity in building new kinds of tools that go beyond what people typically get these days with no-code interfaces.
“Usually when I see visual programming it’s no less complicated than regular programming, so I don’t really see the point,” he said. “We are allowing for very significant no-code developing including certain logic in the system, which we think should suffice for most use cases, and for users who wish to extend beyond that, we will allow for script writing.”
If you wonder why founders who are only still talking in general platitudes are getting $18 million in a seed round, then chances are they have shown some interesting early developments to investors, and they likely got the doors opened to those backers because of their backgrounds. In this case, Yablonka has a long history of building and selling his own companies to a number of bigger tech giants, with interestingly a focus not on gaming but security. That is an interesting angle when you consider how central the themes of data protection and cyber have become in recent years.
Yablonka knows Vadim Zak and Guy Pitelko from a couple of those experiences, including working at ad fraud prevention specialist ClarityRay, which eventually got acquired by Yahoo (which is now the parent company of TechCrunch). Zak is now the VP of R&D at Kooply, and Pitelko — a data scientist by training — is the chief data science office. The fact that there are three technical people as co-founders who have experience touching the adjacent parts of the mobile games business (security, monetization) says a little something, I think, about how they are approaching building a games development platform, and what they see as the most valuable things to put into it.
What will be left to discover is whether the games design community feels the same, and whether the proof is in the pudding: whether audiences come to the games as promised.
For now investors are intrigued enough to punt.
“Kooply embodies everything TPY Capital seeks in a startup: a visionary, yet grounded team with mutual entrepreneurial backgrounds, and a close proximity to the challenges mobile developers face,” said Dekel Persi, co-founder and managing prat of TPY Capital, in a statement. “Add to that a bold perspective on how to democratize game development and favorable trends such as the growth of UGC in game development, as well as the prominence of mobile in this space, and this becomes an extremely compelling story.”
“We believe Kooply has the potential to create an entirely new gaming category that can capture hundreds of millions of users,” added M12 partner Irad Dor. “Kooply is tapping into a rapidly growing market that has been disrupted by technological advances in mobile networks, devices, and consumer behavior. They understand how to meet users where they are, with compelling content they’ll want to stay and engage with. The ability to create for the mobile domain first will be increasingly valuable as the metaverse becomes more established and consumers seek new experiences.”
“As a company, we strongly believe in encouraging and supporting visionary gaming entrepreneurs. What stood out most about Kooply’s approach was its focus on mobile native creation specifically and the ease of use of its tools not just to create experiences, but also to operate these experiences after their creation,” added Eric Rapps, chief strategy officer at Playtika. “Kooply is one of the few companies to understand the game management challenges and lower the barriers to operate user generated content and games as a creator.”