
Get in the KNOW
on LA Startups & Tech
XArtie Reopens its Funding Round and Goes After Mobile Gaming's Bigger Problem
Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake

- L.A.-based Artie, which began in 2018 as a platform to help game publishers build AI-enhanced video game characters but shifted its focus to enabling a distribution method that allows game publishers to circumvent app stores, has reopened its seed round.
- The company plans to go to market later this year with celebrity and IP partnerships, then start attracting third-party game publishers and players to its platform with its distribution technology. In the long run it hopes to grow its user base with its original focus of AI-for-gaming features.
- Artie has raised $8 million from investors, including the founders of Zynga, Shutterstock and YouTube; Warner Music Group; Jeffrey Katzenberg's WndrCo; and three L.A.-based venture firms including Scooter Braun's Raised In Space.
In late 2018, Ryan Horrigan and Armando Kirwin set out to bring to life video game characters who could see and understand and interact with the gamers on the other side of the screen. They quickly recognized a problem that has now taken the tech world by storm: App stores create friction.
After shifting their business model to address that problem, L.A.-based Artie raised a $3.1 million seed round in March, bringing its total funding to $4.5 million. COVID delayed Artie's launch plans, so the company reopened that seed round in August. It has since raised an additional $3.6 million, Horrigan told dot.LA., with the potential to tack on another $1 million before it closes the round in the next week or two.
For the co-founders, the problem with the app stores was not just the 30% cut that Apple and Google take from game publishers – a central concern of the ongoing legal battle between Apple and Epic Games. Also at issue was that mobile gamers – who provide the majority of the $150 billion+ gaming industry's revenues – wouldn't be able to access Artie's AI-enhanced games without having to download a separate application. They couldn't just click on a link inside Instagram, TikTok or Facebook and start playing.
So they built technology to solve this.
Artie plans to charge game publishers 12-15% – at least 50% less than what Apple and Google charge – and offer them a platform to build high-quality games and reach players directly inside of their social media apps and messaging platforms.
Armando Kirwin and Ryan Horrigan are the co-founders of Artie.
This approach is meant to offer game developers two big value propositions. One is financial. Developers obviously save money from the lower platform fee. Horrigan also said Artie hopes to streamline mobile gamers' game-discovery process by providing them instant access to a game without their having to leave whatever app they're on, go to an app store and download a new one. That, they hope, should increase the rate at which users decide to try out a new game. These factors, Horrigan said, should in turn lower publishers' costs of acquiring new players.
In some cases, publishers can also monetize their games more easily when they circumvent app stores. Apple, for example, restricts games' ability to make money via in-game purchases: things like jealousy-inducing outfits to dress up one's virtual character or paying to accelerate the rate at which one can progress through a game. This revenue stream is particularly important for tapping the "whales," the small percentage of gamers who supply an outsized proportion of mobile gaming's revenue.
The other benefit that Artie's approach is meant to provide developers is the opportunity to produce higher-quality games. Although both Facebook and Snap have recently made gaming a larger part of their platforms – though not without controversy – the games on those platforms are largely written in HTML5, a coding language that works well for simple games but less so for more complex games. Allowing publishers to write in Unity, by contrast, may help Artie to attract more skilled programmers, Horrigan said.
Lots of big names have bought into Artie's vision. Investors in the latest $3.6 million extension include Mark Pincus, founder of mobile gaming giant Zynga; Jon Oringer, founder of stock-image provider Shutterstock; Harris Blitzer Sports & Entertainment, a holding company whose assets include the Philadelphia 76ers and New Jersey Devils; Winklevoss Capital (yep, those guys); and a syndicate of NFL and NBA players whose names Horrigan would not disclose.
Earlier investors include Chad Hurley, founder of YouTube; Warner Music Group; Peter Thiel's Founders Fund; WndrCo, Jeffrey Katzenberg's investment firm; media analyst and investor Matthew Ball; and L.A.-based venture firms MaC Venture Capital, Muse Capital and Raised In Space, which was founded by entertainment entrepreneur Scooter Braun and is the lead investor in Artie's seed round.
"The most inspiring thing about the gaming space is that whenever a new format, device or access model is found, we see substantial growth that doesn't require cannibalizing old revenue streams," Ball, who has written extensively on gaming, wrote to dot.LA. "In Artie, I see a highly skilled and technical team that I think can deliver; a thesis that's compelling to content owners, developers and players; and an opportunity to build both defensible tech and potentially a studio, too."
Investors surely noticed that Playco, a Tokyo-based mobile gaming company with a slightly different approach from Artie but a similar goal of reducing distribution friction, launched this weekalready as a unicorn.
Artie plans to start by releasing its own games at the end of this year and beginning of 2021.
It then hopes to build traction by launching with well-known intellectual property and celebrity partners to leverage their social media followings. Horrigan said he could not share specifics due to non-disclosure agreements, but these include a popular superhero brand, widely recognizable cartoon characters, a superstar athlete and a famous musician.
Later on next year, Artie will open up its platform to third-party game developers.
The next-generation AI enhancements that were once the company's central focus will be available to developers, but the features that allow players to interact with characters via voice, text and the camera will be optional.
Horrigan likened the strategy to what Niantic, the developer of Pokémon Go, has done with its third-party developer approach. The Bay Area company's development platform is available to external developers, who may use Niantic's AR functionality but can also simply leverage its location-based technology that is arguably more essential to the gotta-catch-em-all gameplay experience.
The goal for Artie, Horrigan said, is for the distribution technology to help the company build a flywheel wherein the more developers it attracts, the more players will come, which will attract more developers and so on.
The longer-term vision, though, is to retain and grow that player base with the hyper-personalized, artificially intelligent game features.
With this extended seed round, it's game on.
---
Sam Blake primarily covers entertainment for dot.LA. Find him on Twitter @hisamblake and email him at samblake@dot.LA
- Three Gaming Startups Pitch Top Gaming VCs - dot.LA ›
- Gaming Became One of the Hottest Form of Entertainment - dot.LA ›
- FaZe Clan Has a New CFO and Artie Closes $10M Seed Round - dot.LA ›
- FaZe Clan Has a New CFO and Artie Closes $10M Seed Round - dot.LA ›
- Peacock Sees Mobile Users Surge During Olympics - dot.LA ›
- Peacock Sees Mobile Users Surge During Olympics - dot.LA ›
- Artie Mobile Gaming and NFT Startup Raises $35.9 Million - dot.LA ›
Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
Subscribe to our newsletter to catch every headline.
California Debates Data Privacy as SCOTUS Allows Abortion Bans
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
The United States Supreme Court called a Mississippi law banning abortion after 15 weeks constitutional on Friday, overturning the country’s founding abortion rights decision Roe v. Wade. The Supreme Court also upheld that there cannot be any restriction on how far into a pregnancy abortion can be banned.
When Politico first broke the news months before SCOTUS’s final ruling, a slew of bills entered Congress to protect data privacy and prevent the sale of data, which can be triangulated to see if a person has had an abortion or if they are seeking an abortion and have historically been used by antiabortion individuals who would collect this information during their free time.
Democratic lawmakers led by Congresswoman Anna Eshoo called on Google to stop collecting location data. The chair of the Federal Trade Commission has long voiced plans for the agency to prevent data collection. A week after the news, California Assembly passed A.B. 2091, a law that would prevent insurance companies and medical providers from sharing information in abortion-related cases (the state Senate is scheduled to deliberate on it in five days).
These scattered bills attempt to do what health privacy laws do not. The Health Insurance Portability and Accountability Act, or HIPAA, was established in 1996 when the Internet was still young and most people carried flip phones. The act declared health institutions were not allowed to share or disclose patients’ health information. Google, Apple and a slew of fertility and health apps are not covered under HIPAA, and fertility app data can be subpoenaed by law enforcement.
California’s Confidentiality of Medical Information Act (or CMIA), goes further than HIPAA by encompassing apps that store medical information under the broader umbrella of health institutions that include insurance companies and medical providers. And several how-tos on protecting data privacy during Roe v. Wade have been published in the hours of the announcement.
But reproductive rights organizations say data privacy alone cannot fix the problem. According to reproductive health policy think tank Guttmacher Institute, the closest state with abortion access to 1.3 million out-of-state women of reproductive age is California. One report from the UCLA Center on Reproductive Health, Law and Policy estimates as many as 9,400 people will travel to Los Angeles County every year to get abortions, and that number will grow as more states criminalize abortions.
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
LA Tech ‘Moves’: Adtech Firm OpenX Lures New SVP, Getlabs and DISQO Tap New VPs
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
“Moves,” our roundup of job changes in L.A. tech, is presented by Interchange.LA, dot.LA's recruiting and career platform connecting Southern California's most exciting companies with top tech talent. Create a free Interchange.LA profile here—and if you're looking for ways to supercharge your recruiting efforts, find out more about Interchange.LA's white-glove recruiting service by emailing Sharmineh O’Farrill Lewis (sharmineh@dot.la). Please send job changes and personnel moves to moves@dot.la.
***
Advertising technology company OpenX Technologies appointed Geoff Wolinetz as senior vice president of demand platforms. Wolinetz was most recently senior vice president of growth at Chalice Custom Algorithms.
Remote health care infrastructure provider Getlabs hired Jaime LaFontaine as its vice president of business development. L.A.-based LaFontaine was previously director of business development for Alto Pharmacy.
Customer experience platform DISQO tapped Andrew Duke as its vice president of product, consumer applications. Duke previously served as Oracle’s senior director of strategy and product.
Media company Wheelhouse DNA named Michael Senzer as senior manager of Additive Creative, its newly launched digital talent management division. Senzer was previously vice president of business development at TalentX Entertainment.
Fintech lending platform Camino Financial hired Dana Rainford as vice president of people and talent. Rainford previously served as head of human resources at Westwood Financial.
Kourtney Day returned to entertainment company Jim Henson’s Creature Shop as senior director of business development. Day mostly recently served as business development manager for themed entertainment at Solomon Group.
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
This Week in ‘Raises’: Miracle Miles Lands $100M, Fintech Startup Tapcheck Hauls $20M
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
In this week’s edition of “Raises”: An L.A.-based footwear company closed $100 million to boost its expansion into the global market, while there were Series A raises for local fintech, biotech and space startups.
***
Venture Capital
Miracle Miles Group, an L.A.-based footwear company, raised a $100 million Series A funding round co-led by IDG Capital and Sequoia Capital China.
Deno, a San Diego-based software development startup, raised a $21 million Series A funding round led by Sequoia Capital.
Tapcheck, an L.A.-based financial wellness startup that helps workers access their paycheck before payday, raised a $20 million Series A funding round led by PeakSpan Capital.
Gemelli Biotech, an L.A.- and Raleigh, N.C.-based biotech startup focused on gastrointestinal diseases, raised a $19 million Series A financing round led by Blue Ox Healthcare Partners.
Epsilon3, an L.A.-based space operations software startup, raised a $15 million Series A funding round led by Lux Capital.
Global Premier Fertility, an Irvine-based fertility company, raised an $11 million Series C funding round led by Triangle Capital Corporation.
Vamstar, an L.A.- and London-based medical supply chain platform, raised a $9.5 million Series A funding round co-led by Alpha Intelligence Capital and Dutch Founders Fund.
System 9, an L.A.-based digital asset market-making firm focused on the crypto altcoin market, raised a $5.7 million Series A funding round led by Capital6 Eagle.
Myria, an L.A.-based online marketplace of luxury goods and services, raised a $4.3 million seed round from Y Combinator, Backend Capital, Cathexis Ventures and other angel investors.
Binarly, an L.A.-based firmware cybersecurity company, raised a $3.6 million seed round from WestWave Capital and Acrobator Ventures.
Raises is dot.LA’s weekly feature highlighting venture capital funding news across Southern California’s tech and startup ecosystem. Please send fundraising news to Decerry Donato (decerrydonato@dot.la).
- Vamstar Raises $9.5M For Its Medical Supply Chain Platform - dot.LA ›
- MaC Venture Capital Eyes $200 Million For Its Second Fund - dot.LA ›
- Los Angeles Venture Capital News - dot.LA ›
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.