hahaha, an immersive, user-generated, low-code gaming platform in Helsinki and Shanghai founded by a group of Chinese gaming vets, caused a stir in January when it announced cumulative funding of $50 million ahead of its alpha launch in April. Now, with 100,000 creators and hundreds of thousands of players, it has raised another $40 million to build its product — specifically to generate revenue and more social hooks — and to hire more talent and for business development.
Yahaha describes this as an extension to the previous round, specifically a “Series A+”. We’re asking for an updated valuation, but for some context, when it announced funding 11 months ago, I was told the valuation was a “few hundred million” (so in the wide $300-500 million range) . The raise and appreciation both stand out against a backdrop of low fundraising, especially for consumer startups.
Yahaha profiles itself as a company with two headquarters, but the investors in this latest increase are all from China and Asia.
Singapore-based Temasek and Chinese internet giant Alibaba are leading this investment along with another Chinese company, 37 Interactive Entertainment, which is also participating. Previously, the company had raised funding from 5Y Capital, HillHouse, Coatue, ZhenFund, Bertelsmann Asia Investments, BiliBili and Xiaomi.
The company said it now has more than 150 employees, with offices in Helsinki, Seoul and Shanghai. LinkedIn, which shut down its operations in China last year, notes that about half of the company’s employees registered on its platform identify as based out of Shanghai.
“Metaverse” as a concept has especially seen a lot of hype earlier this year — not least spearheaded by one of the largest consumer internet companies of our time, Facebook, which is rebranding itself as “Meta” and going all-in on the concept.
Much of that hasn’t come to much so far, one big clock being that Meta himself is shying away from an own goal in his own efforts.
However, most generally agree that gaming has been one of the few highlights where gamers are willing to pay for and use hardware and software to enhance the immersive experience of their experiences.
Yahaha takes that opportunity and links it to a few more big trends.
User-generated content has long been a popular aspect of gaming and entertainment in general, but recently it has taken on a more sophisticated, business-oriented aspect: people who in the past made media for fun have now become “creators” who see opportunities in building content and using it to connect with audiences. Not all of those creators – actually not many of them – are “technical,” so that leads to attention (and funding) for companies building platforms to help creators create and increase their business opportunities without a lot of heavy technical lifting.
And that’s where Yahaha comes in. The company’s founders – Chris Zhu (CEO), Pengfei Zhang (COO) and Hao Min (CTO) – all worked together as engineers at the cross-platform gaming engine Unity – indeed Yahaha has been described to me as being built in collaboration with Unity – and their low-code platform is meant to do all that heavy lifting behind the scenes.
With makers and the companies building them in mind, the new features the product will get will include more “money generation modules” and other commercial developments, Zhu said.
“We’ve seen fantastic growth in YAHAHA during the Early Alpha phase, and with over 100,000 creators signed up to create content with us, we’re building a strong foundation,” Zhu said in a statement. “This round of funding marks the next step we take with YAHAHA, opening more monetization modules for creators. We also continue to pioneer by investing in key areas of the community and building relationships with brands that share our values, by aligning ourselves with experts in game development, 3D asset creation, and more. With YAHAHA, we’re not just ushering in the next generation of entertainment, we’re supporting the next generation of creators and giving them the tools and integrated virtual world platform they need to create great content. There is a litany of opportunities ahead in the virtual world, and we want to lead the way with YAHAHA. To do this, it is imperative that we continue to invest in our team and in the community that has brought us to where we are today.”
The big question will be whether those who dabble with Yahaha in the early version will stick around when monetization kicks in, whether monetization works, whether games are entertaining enough to engage players, and of course, whether metaverse is establishing itself as a fixed value in the market, rather than a passing phase, as gamers move to the next level.