a16z, Avenir and Google back South African mobile game publisher Carry1st in $20 million seed round – TechCrunch
Carry1st, a South African publisher of social games and interactive content across Africa, has raised a $20m Series A expansion led by Andreessen Horowitz (a16z). This is a16z’s first investment in an Africa-based company (the company has previously invested in Branch and Zipline, companies with some of its operations in Africa but headquartered in the United States).
Carry1st has also received investment from Avenir and Google; it is the latter’s second check from his Africa Investment Fund.
A few prominent individual investors, including Nas and the founders of Cash shredder, Sky Mavis and Yield Guild Games, participated.
The round – which is an expansion of Series A Carry1st raised last May from Riot Games, Konvoy Ventures, Raine Ventures and TTV Capital – also saw the same investors double their investments in the company.
Andreessen Horowitz general partners David Haber and Jonathan Lai will join the Carry1st board as observers.
Cordel Robbin Coker, Lucy Hoffman and Tinotenda Mundangepfupfu founded Carry1st in 2018. The South African-based company, which currently has a team of 37 people in 18 countries, wants to use this Additional capital to develop interactive content across Africa.
The company started as a game studio where it conceptualized, developed (from system designs to artwork and engineering), and launched mobile games. Over time, he transitioned to a hybrid model, taking on a publishing role and managing distribution, marketing and operations.
Carry1st co-founder and managing director Robbin-Coker told TechCrunch that the company has principally focused on its publishing branch ever since.
The three-year-old company has signed publishing deals for seven games from six studios globally, including Tilt point, publisher of Nickelodeon’s Spongebob: Crispy Kitchen, which Carry1st recently launched in Africa. Others include Crazy Labs and Sweden Raketspel, a studio with over 120 million downloads in its portfolio.
Carry1st said it provides a complete publishing solution, handling user acquisition, live operations, community management and monetization for its partners.
“We have a complete service that starts with distribution and partnerships. We help them create bespoke marketing materials, from short advertising videos to statics, and we personalize their content to resonate with individuals from different countries,” Robbin-Coker said.
“And then we exploit the game and we also monetize it. So we built our monetization engine at allow users to be able to pay for the content they want more easily across Africa.”
It also enhances monetization in the region through its integrated payment solutions, where customers can pay through a range of local payment options, including bank transfers, crypto, and mobile money.
Shortly after closing its Series A, Carry1st launched its online marketplace for virtual goods. On this marketplace, called Carry1st Shop, users of a Carry1st game can purchase virtual goods such as airtime, mobile data, entertainment vouchers, grocery vouchers, and in-game currency.
Gaming revenue is up 90% month-over-month since the second half of last year, the company said.. This is not unexpected considering the amazing growth of games in terms of quantity and revenue (gaming apps accounted for nearly 70% of all App Store revenue last year) across Apple and Google stores since the pandemic.
The company’s online market is growing even faster, Robbin-Coker said, particularly among users in South Africa and Nigeria.
Carry1st will use this funding to expand its content portfolio, grow its product and engineering teams, and secure “tens of millions” of new users thanks to this growth in revenue from its games and market products.
In a press release, the company announced its intention to to acquire more users by expanding into co-developing games with studios. He is also considering the possibility of developing an infrastructure to support gambling in Africa, thus venturing into the web3.
Cryptocurrency tokens such as SLP, AXS, and MANA are used in play-to-earn games. They can be removed to a crypto wallet and exchanged for another cryptocurrency like bitcoin or ultimately sold for fiat money to to be used in the real world. Carry1st wants to create on- and off-ramps (platforms that convert fiat to crypto and vice versa) and accept crypto at the point of sale in its marketplace.
“When we think About Carry1st, we want to be the leading consumer internet company in the region. And we think that the best kind of coin would be able to do that is a combination of gaming and micropayments and e-commerce,” the CEO said.
“Tthese industries are pretty significantly disrupted or augmented with web3 and crypto. And as more gaming content begins to integrate with NFTs and cryptocurrencies, we think there is a really great opportunity to partner with these studios the same way we partner with free studios.
Africa is the next big growth market for games globally. The rapid adoption of the technology by its 1.1 billion millennials and GenZ is a big driver. Carry1st published a report with Newzoo last year showing that the number of games in sub-Saharan Africa will increase by 275% over the next decade.. Gaming revenue are projected to see a 728% increase over the same period.
These stats show a much larger addressable market than Carry1st envisaged when it was launched four years ago. And with the convergence of business at the intersection of gaming, fintech and web3, there is a wider set of opportunities (which we can see in other emerging markets) to be seized in Africa. This is one of the factors that piqued a16z’s interest in the company.
“We are delighted making our first investment in an Africa-based company in Carry1st, a next-generation mobile gaming and fintech platform,” Haber said in a statement. “We see a huge opportunity for the business to mirror the outstanding successes we have seen in markets like India, China and South East Asia.. We couldn’t be more thrilled to partner with founders Cordel, Lucy, Tino and the Carry1st team on their mission to build the Garena of Africa.”
Carry1st was apparently intentional about the investors he brought into this round, especially as he seeks to grow deep into games, web3 and fintech across Africa.
As one of the largest crypto-centric funds, with over $3 billion, a16z brings unrivaled gaming and web3 expertise. Google, through its products and phones, will help Carry1st deepen its penetration and engagement in Africa. At the same time, Avenir continues to make a big boost in African fintech following its high-profile check in Flutterwave.
As far as individual investors go, Nas has been quite prolific with his crypto investments, and the founders of Axie Infinity own the largest Web3 gaming company in the world.
“It’s a heavyweight group. We are delighted and we think that their combination will be beneficial for us. With a bit of luck, it’s a sign that we’re on the right track and will help us build strategic partnerships in the future,” said Robbin-Coker..