Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I wrote about Uber’s new “money” team. Before that, I told you about how SoftBank is screwing up.
Airbnb’s growing up
Following the death of five people at a Halloween party hosted at a California Airbnb rental, and a scathing Vice report outlining Airbnb’s failure to prevent nation-wide scams, the company says it will begin verifying all seven million of its listings.
Airbnb properties will soon be verified for accuracy of photos, addresses, listing details, cleanliness, safety and basic home amenities, according to a company-wide email sent by Airbnb co-founder and chief executive officer Brian Chesky on Wednesday. All rentals that meet the company’s new standards will be “clearly labeled” by December 15, 2020, he notes. Beginning next month, Airbnb will rebook or refund guests who check into rentals that do not meet the new accuracy standards.
These changes, outlined fully here, come as Airbnb preps for an IPO or a direct listing slated for 2020. The company was in need of some serious additions to its barely-there security measures and it also needed to make a grand gesture (or two) to Wall Street following multiple PR disasters over the last two weeks. Airbnb’s response to the recently-highlighted problems will help determine how it fares on the public market and given its quick and seemingly comprehensive response, money managers may be pleased.
Meet me in Berlin
The TechCrunch team is heading to Berlin again this year for our annual event, TechCrunch Disrupt Berlin, which brings together entrepreneurs and investors from across the globe. We announced the agenda this week, with leading founders including Away’s Jen Rubio and UiPath’s Daniel Dines. Take a look at the full agenda.
- Coveo raises $ 172M at $ 1B valuation for AI-based enterprise search and more
- Cyber-skills platform Immersive Labs nabs $ 40M
- Medopad raises $ 25M to develop biomarkers tracked via apps and wearables
- Neural Magic secures $ 15M seed to run machine learning models on commodity CPUs
- Chronosphere launches with $ 11M Series A
- Stealth fintech Digits nabs $ 10.5M from Benchmark
- Parabol, the meta-meeting software toolkit, raises $ 4M
- Wardrobe picks up $ 1.5M for a new fashion rental service
- YC-grad Elpha picks up seed funding
Joshua Luber runs a sneaker empire valued at more than $ 1 billion, but he thinks they’re just now scratching the surface. The consumer marketplace recently expanded to include a fifth category (collectibles). “It’s an evolution of eBay that works similar to the stock market,” Luber states, “but at the core, it’s around the concept of true market price.”
We visited StockX’s 15,000-square-foot facility in Detroit to get a peek into their authentication process, and sat down with Luber to chat about humble beginnings, business expansion and sneakers.
Voters in San Francisco have resoundingly rejected an attempt to overturn a citywide ban on e-cigarettes by a margin of around 80:20.
Reporting on the count in the Bay Area, CBS SF says at least 78 per cent of voters rejected the ballot measure, known as Proposition C.
The measure had been heavily back by e-cigarette maker Juul — until just over a month ago. It is reported to have spent at least $ 10M promoting the attempt to flip the ban, before withdrawing its support at the end of September as part of a company-wider review under new CEO, K.C. Crosthwaite, that’s also seen between 10-15% of its workforce lay off.
The 2017-founded company, which has raised some $ 14.4BN in funding to date per Crunchbase, has faced trenchant criticism over the level of youth usage of its products.
In a statement responding to the Prop C vote, San Francisco city attorney Dennis Herrera attacks Juul — dubbing the company “Big Tobacco” — and writing: “San Francisco voters are too smart to be fooled by Juul. Juul is Big Tobacco, and it’s using a classic ploy from the Big Tobacco playbook to try and hook another generation of kids on nicotine. Voters saw right through Juul’s deception. San Francisco already has the toughest e-cigarette regulations in the nation. By law, e-cigarettes must undergo FDA review to ensure they are safe for public health. Complete FDA review and you can sell your product here. If you don’t, you can’t. It’s that simple.”
We’ve reached out to Juul for comment. Update: A company spokesman told us:
As previously announced, Juul Labs ceased active support of Proposition C in September as part of new CEO K.C. Crosthwaite’s broad review of the company’s practices and policies. Crosthwaite said at the time, “I am committed to seeing that Juul engages productively with all stakeholders, including regulators, policymakers and our customers. This decision does not change the fact that as a San Francisco-founded and headquartered company we remain committed to the city. San Francisco is not only the home of our company’s founding but is also the home of many of our talented employees.”
In October Juul announced it would stop selling mango, creme, fruit and cucumber flavored nicotine products in the US, while continuing to sell the flavors elsewhere. But it did not commit to permanently giving up on selling flavored nicotine products — in the US or anywhere.
Vaping generally has also been under a growing cloud of suspicion after a number of e-cigarette users died from an acute lung condition which appears related to the process of chemicals being vaporized and inhaled — and potentially to devices being used to vape THC.
Third party sellers hawk unofficial cartridges for e-cigarette devices such as Juul’s which can contain the psychoactive compound found in marijuana, along with other unknown substances. But studies have also shown that even popular e-cigarette brands don’t know exactly what chemicals are produced when the substances contained in their cartridges are vaporized.
“If the FDA can’t verify that these products are safe, then they don’t belong on store shelves,” added Herrera in the statement. “The U.S. Surgeon General has warned that we are in the midst of a youth vaping epidemic. Juul spent millions trying to mislead San Franciscans and rewrite the rules to benefit itself before realizing that was a fool’s errand. It could have put that time and effort into completing the required FDA review. If Juul had done that the day Supervisor Shamann Walton and I introduced our e-cigarette legislation back in March, Juul would have had its answer from the FDA by now. Perhaps FDA review is a test that Juul is afraid it can’t pass.”
Last month a lawsuit filed by a former Juul executive alleged the company knew that a batch of contaminated e-liquid had been used in about one million pods shipped to retailers earlier this year but did not inform customers.
Co-founded by researchers Joseph Glorioso, from the University of Pittsburgh’s microbiology and molecular genetics department; and Dr. Nicholas Boulis, the founder of Emory’s Gene and Cell Therapy for Neurorestoration Laboratory; Coda uses gene therapies to treat neurological diseases starting with severe pain and epilepsy.
America is a country in pain. There are over 19 million Americans who live with chronic neuropathic pain, according to Coda’s own statistics. And over the past twenty years the doctors treating those Americans and the drug companies developing therapies for them have managed to turn their treatment into a new epidemic — opioid addiction.
In 2017, 47,600 Americans died from opioid-involved overdoses, according to the Centers for Disease Control. Of those deaths, about 60% involved synthetic opioids.
“The incentives were there for people to prescribe more and more, particularly when they had already been convinced it was the right thing to do — the compassionate thing to do,” Keith Humphreys, a psychiatrist at Stanford University and a former White House drug-policy adviser, told the journal Nature.
As the pain epidemic and attendant opioid crisis began to skyrocket several companies have been racing to find alternatives to the drug treatments that were now killing Americans by the thousands. Other approaches like electrical nerve stimulation can carry risks, and invasive surgeries are an unappealing last resort, according to Coda’s chief executive.
Coda’s experimental treatment is based on a science called chemogenetics, which uses a harmless virus to create new receptors in the sensory neurons that provide signals to the brain about physical stimuli. Those receptors can be unlocked by small molecule drugs, which would instruct the sensory neurons to stop firing, thereby cutting off the signals of pain to the brain.
The idea behind chemogenetics is to engineer a receptor that when you put it in with a… gene therapy… it does nothing. We’ve engineered it so that it is no longer responsive,” says Michael Narachi, the president and chief executive officer at Coda. “Most of these receptors are naturally opened or closed by acetylcholine… We’ve engineered these receptors so that they’re no longer responsive to acetylcholine, but they are responsive to a man-made drug.”
The company then draws from a portfolio of receptor small-molecule drug pairs that were developed and tested for their pharmacological and toxicological effects, but discarded because of a lack of efficacy, to create new therapies with receptors tailored to respond to those drugs.
“What we’ve done is flipped the whole paradigm on its head. We’re making the lock that can work with these keys,” says Narachi.
So far, the company has raised $ 34 million as investors including Versant Ventures, MPM Capital and Astellas Venture Management have doubled down on their initial $ 19 million commitment to the new drug developer.
“Since coming out of stealth mode last September, the CODA team has made tremendous progress in developing its gene therapy program that is tunable, durable and highly selective, which allows for better efficacy and safety with fewer off-target effects,” said Tom Woiwode, Ph.D., managing director at Versant Ventures and CODA Chairman, in a statement. “CODA’s platform holds great promise to significantly transform how we treat challenging conditions and disorders for which new therapeutic options are greatly needed.”
Pain isn’t the only condition that Coda hopes to treat. The company is also working on therapies that can reduce the severity of epilepsy for the nearly 3.4 million people in the U.S. who have the condition. While the company can’t treat all kinds of epilepsy, Coda says that it could address focal epilepsy, which represents 60% of all manifestations of the condition, and is linked to a specific region of the brain.
By engineering neurotransmitter receptors that are activated by medicines that can be taken orally, Coda thinks it can control the activity of neurons responsible for both chronic pain and focal epilepsy.
The next step for the company — and part of the use of proceeds from its new $ 15 million cash infusion — will . be to proceed with early animal trials. These clinical trials will be followed by human trials.
“This is a research platform,” says Narachi. “We have this portfolio of engineered receptors and we’re testing them in cells. The next step is to go into human clinical trials.”
A man thought he had swallowed the balloon-wrapped marijuana he was smuggling. He hadn’t.
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Using a computer and modern software can be a chore to begin with for the visually impaired, but fundamentally visual tasks like 3D design are even harder. This Stanford team is working on a way to display 3D information, like in a CAD or modeling program, using a “2.5D” display made up of pins that can be raised or lowered as sort of tactile pixels. Taxels!
The research project, a collaboration between graduate student Alexa Siu, Joshua Miele and lab head Sean Follmer, is intended to explore avenues by which blind and visually impaired people can accomplish visual tasks without the aid of a sighted helper. It was presented this week at SIGACCESS.
The device is essentially a 12×24 array of thin columns with rounded tops that can be individually told to rise anywhere from a fraction of an inch to several inches above the plane, taking the shape of 3D objects quickly enough to amount to real time.
“It opens up the possibility of blind people being, not just consumers of the benefits of fabrication technology, but agents in it, creating our own tools from 3D modeling environments that we would want or need – and having some hope of doing it in a timely manner,” explained Miele, who is himself blind, in a Stanford news release.
Siu calls the device “2.5D,” since of course it can’t show the entire object floating in midair. But it’s an easy way for someone who can’t see the screen to understand the shape it’s displaying. The resolution is limited, sure, but that’s a shortcoming shared by all tactile displays — which it should be noted are extremely rare to begin with and often very expensive.
The field is moving forward, but too slowly for some, like this crew and the parents behind the BecDot, an inexpensive Braille display for kids. And other tactile displays are being pursued as possibilities for interactions in virtual environments.
Getting an intuitive understanding of a 3D object, whether one is designing or just viewing it, usually means rotating and shifting it — something that’s difficult to express in non-visual ways. But a real-time tactile display like this one can change the shape it’s showing quickly and smoothly, allowing more complex shapes, like moving cross-sections, to be expressed as well.
The device is far from becoming a commercial project, though as you can see in the images (and the video below), it’s very much a working prototype, and a fairly polished one at that. The team plans on reducing the size of the pins, which would of course increase the resolution of the display. Interestingly another grad student in the same lab is working on that very thing, albeit at rather an earlier stage.
The Shape Lab at Stanford is working on a number of projects along these lines — you can keep up with their work at the lab’s website.
Berlin-based femtech startup Inne is coming out of stealth to announce an €8 million (~$ 8.8M) Series A and give the first glimpse of a hormone-tracking subscription product for fertility-tracking and natural contraception that’s slated for launch in Q1 next year.
The Series A is led by led by Blossom Capital, with early Inne backer Monkfish Equity also participating, along with a number of angel investors — including Taavet Hinrikus, co-founder of TransferWise; Tom Stafford, managing partner at DST; and Trivago co-founder Rolf Schromgens.
Women’s health apps have been having a tech-fuelled moment in recent years, with the rise of a femtech category. There are now all sorts of apps for tracking periods and the menstrual cycle, such as Clue and Flo.
Some also try to predict which days a women is fertile and which they’re not — offering digital tools to help women track bodily signals if they’re following a natural family planning method of contraception, or indeed trying to conceive a baby.
Others — such as Natural Cycles — have gone further down that path, branding their approach “digital contraception” and claiming greater sophistication vs traditional natural family planning by applying learning algorithms to cycle data augmented with additional information (typically a daily body temperature measurement). Although there has also been some controversy around aggressive and even misleading marketing tactics targeting young women.
A multi-month investigation by the medical device regulator in Natural Cycles’ home market, instigated after a number of women fell pregnant while using its method, found rates of failure were in line with its small-print promises but concluded with the company agreeing to clarify the risk of the product failing.
At issue is that the notion of “digital contraception” may present as simple and effortless — arriving in handy app form, often boosted by a flotilla of seductive social media lifestyle ads. Yet the reality for the user is the opposite of effortless. Because in fact they are personally taking on all of the risk.
For these products to work the user needs a high level of dedication to stick at it, be consistent and pay close attention to key details in order to achieve the promised rate of protection.
Natural contraception is also what Inne is touting, dangling another enticing promise of hormone-free contraception — its website calls the product “a tool of radical self-knowledge” and claims it “protect[s]… from invasive contraceptive methods”. It’s twist is it’s not using temperature to track fertility; its focus is on hormone-tracking as a fertility measure.
Inne says it’s developed a saliva-based test to measure hormone levels, along with an in vitro diagnostic device (pictured above) that allows data to be extracted from the disposable tests at home and wirelessly logged in the companion app.
Founder Eirini Rapti describes the product as a “mini lab” — saying it’s small and portable enough to fit in a pocket. Her team has been doing the R&D on it since 2017, preferring, she says, to focus on getting the biochemistry right rather than shouting about launching the startup. (It took in seed funding prior to this round but isn’t disclosing how much.)
At this stage Inne has applied for and gained European certification as a medical device. Though it’s not yet been formally announced.
The first product, a natural contraception for adult women — billed as best suited for women aged 28-40, i.e. at a steady relationship time-of-life — will be launching in select European markets (starting in Scandinavia) next year, though initially as a closed beta style launch as they work on iterating the product based on user feedback.
“It basically has three parts,” Rapti says of the proposition. “It has a small reader… It has what we call a little mouth opening in the front. It always gives you a smile. That’s the hardware part of it, so it recognizes the intensity of your hormones. And then there’s a disposable saliva test. You basically collect your saliva by putting it in your mouth for 30 seconds. And then you insert it in the reader and then you go about your day.
“The reader is connected to your phone, either via BlueTooth or wifi, depending on where you are taking the test daily… It takes the reading and it sends it over to your phone. In your phone you can do a couple of things. First of all you look at your hormonal data and you look at how those change throughout the menstrual cycle. So you can see how they grow, how they fall. What that means about your ovulation or your overall female health — like we measure progesterone; that tells you a lot about your lining etc. And then you can also track your fluids… We teach you how to track them, how to understand what they mean.”
As well as a contraception use-case, the fertility tracking element naturally means it could also be used by women wanting to get pregnant.
“This product is not a tracker. We’re not looking to gather your data and then tell you next month what you should be feeling — at all,” she adds. “It’s more designed to track your hormones and tell you look this is the most basic change that happens in your body and because of those changes you will feel certain things. So do you feel them or not — and if you don’t, what does it mean? Or if you do what does it mean?
“It builds your own hormonal baseline — so you start measuring your hormones and we go okay so this is your baseline and now let’s look at things that go out of your baseline. And what do they mean?”
Of course the key question is how accurate is a saliva-based test for hormones as a method for predicting fertility? On this Rapti says Inne isn’t ready to share data about the product’s efficacy — but claims it will be publishing details of the various studies it conducted as part of the CE marking process in the next few weeks.
“A couple more weeks and all the hardcore numbers will be out there,” she says.
In terms of how it works in general the hormone measurement is “a combination of a biochemical reaction and the read out of it”, as she puts it — with the test itself being pure chemistry but algorithms then being applied to interpret the hormonal reading, looping in other signals such as the user’s cycle length, age and the time of day of the test.
She claims the biochemical hormone test the product relies on as its baseline for predicting fertility is based on similar principles to standard pregnancy tests — such as those that involve peeing on a stick to get a binary ‘pregnant’ or ‘not pregnant’ result. “We are focused on specifically fertility hormones,” she says.
“Our device is a medical device. It’s CE-certified in Europe and to do that you have to do all kinds of verification and performance evaluation studies. They will be published pretty soon. I cannot tell you too much in detail but to develop something like that we had to do verification studies, performance evaluation studies, so all of that is done.”
While it developed and “validated” the approach in-house, Rapti notes that it also worked with a number of external diagnostic companies to “optimize” the test.
“The science behind it is pretty straightforward,” she adds. “Your hormones behave in a specific way — they go from a low to a high to a low again, and what you’re looking for is building that trend… What we are building is an individual curve per user. The starting and the ending point in terms of values can be different but it is the same across the cycle for one user.”
“When you enter a field like biochemistry as an outsider a lot of the academics will tell you about the incredible things you could do in the future. And there are plenty,” she adds. “But I think what has made a difference to us is we always had this manufacturability in mind. So if you ask me there’s plenty of ways you can detect hormones that are spectacular but need about ten years of development let alone being able to manufacture it at scale. So it was important to me to find a technology that would allow us to do it effectively, repeatedly but also manufacture it at a low cost — so not reinventing the whole wheel.”
Rapti says Inne is controlling for variability in the testing process by controlling when users take the measurement (although that’s clearly not directly within its control, even if it can send an in-app reminder); controlling how much saliva is extracted per test; and controlling how much of the sample is tested — saying “that’s all done mechanically; you don’t do that”.
“The beauty about hormones is they do not get influenced by lack of sleep, they do not get influenced by getting out of your bed — and this is the reason why I wanted to opt to actually measure them,” she adds, saying she came up with the idea for the product as a user of natural contraception searching for a better experience. (Rapti is not herself trained in medical or life sciences.)
“When I started the company I was using the temperature method [of natural contraception] and I thought it cannot be that I have to take this measurement from my bed otherwise my measurement’s invalid,” she adds.
However there are other types of usage restrictions Inne users will need to observe in order to avoid negatively affecting the hormonal measurements.
Firstly they must take the test in the same time window each time — either in the morning or the evening but sticking to one of those choices for good.
They also need to stick to daily testing for at least a full menstrual cycle. Plus there are certain days in the month when testing will always be essential, per Rapti, even as she suggests a “learning element” might allow for the odd missed test day later on, i.e. once enough data has been inputted.
Users also have to avoid drinking and eating for 30 minutes before taking the test. She further specifies this half hour pre-test restriction includes not having oral sex — “because that also affects the measurements”.
“There’s a few indications around it,” she concedes, adding: “The product is super easy to use but it is not for women who want to not think ever about contraception or their bodies. I believe that for these women the IUD would be the perfect solution because they never have to think about it. This product is for women who consciously do not want to take hormones and don’t want invasive devices — either because they’ve been in pain or they’re interested in being natural and not taking hormones.”
At this stage Inne hasn’t performed any comparative studies vs established contraception methods such as the pill. So unless or until it does users won’t be able to assess the relative risk of falling pregnant while using it against more tried and tested contraception methods.
Rapti says the plan is to run more clinical studies in the coming year, helped by the new funding. But these will be more focused on what additional insights can be extracted from the test to feed the product proposition — rather than on further efficacy (or any comparative) tests.
They’ve also started the process of applying for FDA certification to be able to enter the US market in future.
Beyond natural contraception and fertility tracking, Inne is thinking about wider applications for its approach to hormone tracking — such as providing women with information about the menopause, based on longer term tracking of their hormone levels. Or to help manage conditions such as endometriosis, which is one of the areas where it wants to do further research.
The intent is to be the opposite of binary, she suggests, by providing adult women with a versatile tool to help them get closer to and understand changes in their bodies for a range of individual needs and purposes.
“I want to shift the way people perceive our female bodies to be binary,” she adds. “Our bodies are not binary, they change around the month. So maybe this month you want to avoid getting pregnant and maybe next month you actually want to get pregnant. It’s the same body that you need to understand to help you do that.”
Commenting on the Series A in a supporting statement, Louise Samet, partner at Blossom Capital, said: “Inne has a winning combination of scientific validity plus usability that can enable women to better understand their bodies at all stages in their lives. What really impressed us is the team’s meticulous focus on design and easy-of-use together with the scientific validity and clear ambition to impact women all over the world.”
Let’s be honest, this is better for everyone.
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I’ve been tearing my gadgets apart for as long as I can remember. Consoles, phones, printers, whatever — I’ve always needed to see what makes it all work. Sometimes they even work when I put them back together.
As soon as Google announced that the new Pixel 4 had friggin’ radar built-in for detecting hand gestures, I needed to see under the hood. While I haven’t picked up a Pixel 4 yet, our friends over at iFixit busted out the heat guns and did what they do best, tearing the Pixel 4 XL down to parts and uncovering the Project Soli radar chip along the way.
Image Source: iFixit
That board you’re looking at contains a good amount of stuff beyond the Soli chip — it’s also where you’ll find the earpiece speaker and the ambient light sensor, for example. The Soli chip seems to be that little greenish box in the upper-right area.
Alas, there’s… not a ton to learn just from looking at it. Google has spent the last few years working on this, and they’ve ended up with something that’s honestly a bit wild. With no moving parts, and without line of sight, these chips are able to do things like detect when people are near the device (and how many), whether they’re standing or sitting, how they’re moving their hands and more. As iFixit so succinctly puts it, “TL;DR: magic rectangle knows your every move.”
For anyone looking to tear apart the Pixel 4 XL themselves, be it to make repairs or just out of curiosity, make sure you know what you’re getting into. iFixit gives the device a relatively paltry 4 out of 10 on its repairability score, citing easily breakable pull tabs and particularly strong adhesives as obstacles along the way. You can find their full teardown here.
Image Source: iFixit
Apple Arcade introduced the idea of all-you-can-eat subscription-based mobile gaming to the mainstream. Google Play Pass soon followed as a way to subscribe to a sizable collection of both apps and games on Android devices. Today, a startup called GameClub is launching in the U.S. to offer an alternative. For $ 4.99 per month, mobile consumers will be able to access a library that includes some of the best games to have ever hit the App Store.
To be clear, GameClub is not a cloud gaming platform, like Google Stadia. It’s a way to subscribe to actual App Store games, similar to Arcade. In GameClub’s case, however, the focus is not on new releases but on quality games that already have proven track records and high ratings.
In fact, many GameClub games have made Apple’s own editorially selected “Game of the Year” lists in years past. And like the games offered on Apple Arcade, they don’t have ads or any in-app purchases.
At launch, GameClub’s library includes more than 100 titles, with around half that available for play today. More titles will roll out on a weekly basis in the months ahead. Combined, the games have over 100 million collective downloads, the company says.
On GameClub, you’ll find games like: Super Crate Box, Hook Champ, Mage Gauntlet, Space Miner, Forget-Me-Not, MiniSquadron, Plunderland, Pocket RPG, Sword of Fargoal, Incoboto, Tales of the Adventure Company, Hook Worlds, Orc: Vengeance, Mr. Particle-Man, Legendary Wars, Deathbat, The Path to Luma, Grimm, Zombie Match, Faif, iBlast Moki 2, Kano, Baby Lava Bounce, Run Roo Run, Gears and many others.
It’s a selection that extends across gaming categories, like Action, Arcade, Puzzle, Adventure, Platformer, Retro, Role Playing, Simulation, Strategy and more.
To use the service, you first download the main GameClub app, which becomes the hub for your GameClub activities. You then sign up for the $ 4.99 per month subscription, which includes a 30-day free trial. Within the main app, you can browse the available titles as well as read editorial content like in-depth overviews and histories, get tips and learn about gaming strategies.
Sherman, GameClub CEO, has worked in the gaming industry for around 17 years, including time spent at EA and his own startup, Tilting Point. His experience has involved, predominantly, signing content partnerships with game creators. Pedersen, meanwhile, built backend systems and platforms for games, including at Yahoo Games.
Though GameClub is seemingly arriving after Apple Arcade’s debut, it actually began before that. The startup was founded in 2018, ahead of any Apple Arcade rumors. It went live on iOS outside the U.S. before Arcade launched.
The founders say they were inspired to address the issues caused by the free-to-play model that has infiltrated the gaming industry. In addition, they had witnessed a decline in consumers’ willingness to purchase content upfront, which was impacting the industry.
“I was seeing all these amazing game developers leave mobile because the types of games they make are not the types of games that monetize through in-app purchases and ads,” Sherman tells TechCrunch. “The free-to-play model actually only works for a handful of genres,” he explains. “A lot of companies make a lot of money through a very small number of genres and game experiences — to the exclusion of a lot of other types of genres that GameClub is bringing back — action, adventures, arcade, tower defense — anything that can be completed.”
With free-to-play, games are built around perpetual retention loops. “And the freemium model comes out of the casino industry, not the premium game industry,” Sherman points out.
But because this is how games could make money, it led to homogeneity in the marketplace, he says.
GameClub aims to offer a subscription to the premium games that got left behind.
They are meant to be wholesome and fun, not overly addictive. They’re not designed to manipulate you into spending money. You simply pay your subscription fee every month to access the catalog, then play unencumbered.
Thanks to Apple Arcade and Google Play Pass, consumers are now comfortable with the idea of the subscription model for mobile games. And other services — like Spotify Netflix, and Xbox Game Pass, for example — have pushed the idea of subscription access to content across platforms and genres.
GameClub is different from Arcade, however, because it’s not funding the development of content upfront — at least, not yet. Instead, it’s forging agreements with largely indie developers to release their existing IP as a GameClub exclusive.
This may include bringing an older game into the 64-bit era — something GameClub handles on their behalf.
“Many of [the GameClub titles] have been gone for many years,” says Sherman. “It’s with our team, our technology and our developers that they’ve been brought back. And they’ve been brought back in a way that is 100% using the original code and the exact same design…but making them look and feel new, with higher resolution, Retina Display assets and by optimizing for the latest screen sizes and configurations,” he adds.
The company doesn’t discuss the business model for GameClub, but it’s not the same as Apple Arcade’s pay-upfront model.
What Sherman could say is that the more important the game is to the GameClub service, the more money the creator makes. Additionally, GameClub says it’s transparent with developers about its subscription revenue, so there’s no question about which games are earning or why.
The same can’t be said for Apple Arcade, which is a total black box to the point that consumers don’t know which Arcade games are most popular, developers can’t see how they’re doing compared with others and third-party measurement firms have no data.
Of course, there could be concerns that GameClub exists in a gray area, with regard to App Store policy. Those with longer memories may recall that Apple banned app-stores-within-a-store starting back in 2012. The company had kicked out apps that recommended other apps like AppHero, FreeAppADay, Daily App Dream, AppShopper and more. It also banned the more popular app recommendation service AppGratis the following year.
But Apple’s concern was that these apps were leveraging their power to manipulate App Store charts and rankings, often charging for that service. GameClub, on the other hand, plays fairly. Its service also benefits Apple, by offering subscription access to quality games that couldn’t thrive as free-to-play titles.
Longer-term, GameClub wants to produce its own original content and offer its service across platforms, starting with Google Play, but eventually tackling PC and console gaming.
The startup is headquartered in New York City, with offices in Copenhagen. In addition to the founders, it includes Eli Hodapp, the former editor-in-chief of the popular game news and review site TouchArcade, and COO Britt Myers, the former chief product officer of subscription-based edtech apps platform Homer.
With the close of a seed round last week, GameClub is backed by $ 4.6 million in funding.
Investors from a round that closed last year include GC VR Gaming Tracker Fund, CRCM Ventures, Watertower Ventures, Ride Ventures, BreakawayGrowth Fund and others. New investors include GFR Fund, Gramercy Fund, CentreGold Capital, and AET Fund.
GameClub is available on the App Store.