The success of Roblox and other user-created gaming experiences like Overwolf have democratized the concept of making games and have taken it into the mainstream. Now, a startup founded by veterans from Unity, Microsoft and EA that is building a new platform for creators to build immersive games, and related communities around like-minded people, is gearing up to launch later this year. Ahead of that, it is disclosing a healthy $50 million in funding.
Yahaha Studios, an Espoo, Finland-based startup with R&D based in Shanghai, has yet to launch a commercial product. But it describes what it is building as a no-code “metaverse for games”, where people can come together in communities to build and play games combing virtual and real-world elements.
The $50 million that it has raised, to be clear, is not new funding: it was pulled together in a period of six months, across three rounds, nearly two years ago, all in 2020.
The company tells me that “round 1” was led by 5Y Capital; “round 2” was led by HillHouse, and “round 3” was led by Coatue. Early investors participated in subsequent rounds, and other backers include ZhenFund, Bertelsmann Asia Investments, BiliBili and Xiaomi. The funding, we’ve confirmed, values Yahaha in the range of $300 million to $500 million (“few hundred millions” is the phrase that was used when we asked).
While Yahaha Studios may still be months from launch, in the meantime it has been quietly running a Discord community with a small group (around 220) of early users. The company tells me that an alpha version of the product will be launching in Q2 of this year. It is not planning to raise any more funding ahead of that, a spokesperson tells me.
“Metaverse” has very quickly become a very over-used word, and a number of companies claim to be blazing trails into this nebulous space, with its promises of combining augmented and virtual reality technologies to create entirely new kinds of digital experiences, gaming and otherwise. It looks like Yahaha has managed to stand apart from the crowd, and found investor attention early on, for a couple of reasons.
First of all, there are the company’s founders — Chris Zhu (CEO), Pengfei Zhang (COO) and Hao Min (CTO) — who all worked together as engineers at cross-platform gaming engine Unity, and have years of experience behind them.
Zhang has been living in Finland for the last 15 years, and this is how the company got started there, but that is not the only reason for basing Yahaha in Espoo: with companies like Supercell also originating in the Helsinki suburb, there is a strong ecosystem in the region for building teams and tapping into new gaming innovations.
The company has confirmed that the Yahaha platform was built in partnership with Unity, a link that in turn will help onboard more creators and more cross-platform gameplay and communities.
Second of all, there is the concept behind Yahaha itself, which focuses on two popular themes in tech at the moment: user-generated content and no-code development. UGC has been a popular part of online entertainment for decades at this point, but platforms like TikTok and Instagram have really given rise to a new focus on “creators”, people building huge audiences and businesses around the content that they are generating.
While platforms like Twitch and Discord have made celebrities out of game players, we haven’t really yet had much in the way of platforms that make it easy for creators to build massive communities around actual games (Roblox partly addresses this but doesn’t feel like a social platform). This is what Yahaha seems to hope to become, and if it works, it could be on to something very interesting.
Building the platform on a “no-code” framework, meanwhile, is what will help make Yahaha potentially used by more people. While a lot of the application of no-code has been in the area of enterprise IT (where people can, for example, easily build integrations between CRMs and accounting software), it’s interesting to see more of it making its way into consumer-focused services, specifically to serve creator communities.
“Achieving an investment of $50 million is incredibly exciting for us,” said CEO Chris Zhu in a statement. “Yahaha Studios has a key part to play in ushering in the next generation of entertainment as the metaverse continues to grow. Connecting users around the world through virtual entertainment, YAHAHA offers a unique creative and social experience to game developers and gamers alike. Through YAHAHA we are empowering creators at all levels, from established developers to those making their first game. Everyone can be a creator in our virtual world. We’re really looking forward to fully launching this year, growing our team and bringing the first stage of our vision for the future of content creation to life.”