Finance Platforms Help Small Game, App Developers Level Up

As inflation runs rampant, consumer spending might be ripe for a pullback.

But at least some industries — the beneficiaries of disposable income — are more resilient than others.

Olya Caliujnaia, co-founder and CEO of Sanlo, told PYMNTS that there’s an insatiable need for people to be entertained, to amuse themselves and to combat the lingering pressures of the pandemic with some fun — and gaming apps seem to be relatively immune to the pressures of the macro economy.

The metaverse looms as a huge tailwind for immersive digital experiences. The pie is huge and is getting bigger, which spells greenfield opportunity for the firms and developers striving to bring new games to market with speed, monetizing consumer demand.

See also: Sony Says It Is Ready to Enter the Metaverse

But dig a bit deeper, and a derivative of that old 80/20 rule in business is a bit skewed in gaming: About 90% of the revenues and market come from 10% of the firms, huge dominant players among them, and that’s where the capital is concentrated.

That leaves scant wiggle room for the 15 million smaller developers around the world — anywhere from two-person shops all the way up to 200 people — that need capital to get their concepts off the ground, having made the leap to actual development, testing and deployment. Those companies, too, have to be fiscally responsible in a tough operating environment.

The belt tightening comes amid a huge burst of creativity and experimentation in the developer community around mixing and matching different genres to create ever-more-engaging experiences.

The goal, Caliujnaia said, now and always, “Is to first exist, and then survive … and then prosper.”

To do that, these developers need access cash — and better data to show them how they are managing capital wisely, leveraging it to jump on new growth initiatives. They may be seeing the potential in a game or an app, but they may not have the right funding available to capitalize on opportunities.

Caliujnaia said that the traditional financing model has been one where nascent firms tend to sell equity stakes in return for funding from venture capital (VC) firms and other partnerships.

But platforms, Sanlo among them, can level the playing field between the smallest developers and the biggest gaming giants, offering up the financing that the upstarts need. Platforms can also offer a one-stop shop where developers can distribute their wares and can engage and ultimately monetize their audience.

Funding for Growth and Development

The conversation came against the backdrop where Sanlo said on Thursday (June 2) that it had closed a $10 million Series A funding round led by Konvoy Ventures, a VC firm that invests in gaming platforms and technologies.

The company has also partnered with HCGFunds to boost its capital fund earmarked for developers to $200 million in additional debt funding — a cash pool dedicated specifically to helping entrepreneurs build out their products and teams. Caliujnaia said the funding is focused on helping Sanlo accelerate its growth and build out its engineering and product teams.

Related: B2B FinTechs Bridge The Bank-Business Gap With New Funding

In terms of mechanics, the company’s platform helps developers discover how to best use funding. That platform helps gather and analyze client firms’ data that delves into app and games popularity and growth with end customers.

“You have to pay attention to the data, to the signals that are in your products that are indicative of whether they will succeed or not,” she said.

As she told PYMNTS, “The majority of developers that we have seen and worked with are not necessarily operating on a luxurious timeline, where they can develop for years and years and not have any financial outcome. They are watching for any signs of existential threat.”

The platform’s financial intelligence tool is free to use, she said. Additionally, the Sanlo platform consolidates banking and accounting information, presenting that data side by side with aggregated revenue streams that the developers generate from different sources. The holistic data, she said, help show whether cash is coming in (hypothetically) from Apple or Google ad networks, and how the cash being generated should be invested back into the developers’ business.

“Based on whether you are going to be turning profitable, or you are already profitable, or if there’s a threat,” Caliujnaia said, then developers may wish to take advantage of the non-dilutive capital on offer from Sanlo.

As she said, for the developers, “There’s real empowerment that comes from knowing where you stand, knowing how you’re doing, and then having access to resources to execute” on plans.