We are pleased to announce our participation in Knock Knock’s $4m Series A round. We invested into Knock Knock last year alongside our friends at Raine Ventures and Ludlow Ventures, and are excited to welcome new investors March Capital. Knock Knock is one of the early movers in the nascent Instant Gaming space, and we wanted to take the chance to talk a little about their process and success.
Move Fast and Play Things
We believe that Instant, or Frictionless, games on on chat platforms and other emerging web platforms will form a significant component of the current $150bn worldwide games market (Newzoo, 2019), but there is currently a lag between monetisation and distribution on current platforms given the potential access to the 6 billion plus IM MAUs (IHS Markit, 2018).
Instant messaging will continue to benefit from both technological and demographic shifts, including mobile penetration reaching maturation in developed economies; telecoms infrastructure slowly removing supply constraints on mobile data usage and speed, enabling real-time text-based and multimedia messaging; and Gen Z – as well as Millennials – demanding more direct, presence-based forms of social communication and interaction, having been reared on the first generation of IM platforms (MSN messenger, BBM etc.). In short, mobile users want to, and now have the means to, connect without friction with friends; and this applies strongly with games.
There is clearly a huge opportunity as product-market fit is achieved, which helps explain the initial flurry of interest by investors looking for deals in the space over the past five to ten years. However, in this nascent market, we decided to stay our hand in the face of strong negative metrics regarding traction, retention and monetisation – that was, until we met Knock Knock. Their deeper product vision and collective team experience gives them a strong advantage in driving this market to scale.
The Knock Knock team recognise the challenge of operating in an embryonic market: on a platform as fast moving as instant messaging, with the casual nature of the interactions between users, rapid development and iteration are key to producing engaging games. The team brings substantial experience and expertise, having released games that have previously grossed over $500m in revenue and generated 100m downloads. Andrew Friday brings his insight from his time at Zynga developing chat games for Facebook Messenger and iMessage. In a vast yet immature market with frictionless access to millions of users, it is imperative to be nimble and adapt to audience feedback.
That is exactly what they have done. Their first game, Car Match: Hollywood, was developed for Facebook Messenger and has been installed by over 5 million users with some fantastic metrics to back this up (especially in Asia). Yet they have not rested on their laurels, and are testing different genres to explore new opportunities in this evolving sector. Having recently launched Golf Buddies, Knock Knock is looking to release more games – including one underpinned by a more character-driven game network – that draw upon lessons learned from these products. Their endeavour to try new things and new markets, as well as quickly learning lessons from those experiments, has impressed us time and again.
Although the initial go-to-market was through Facebook Messenger, Knock Knock is building and incorporating deep in-game economies that enables them to deliver games across a number of additional messenger platforms, including WeChat, Snap, Line and Kakao messenger. Indeed, we have seen that WeChat Mini, hosting a larger and more engaged gaming audience, has monthly revenue figures for top performing games that are 5-10x that of Facebook Instant. Knock Knock’s platform will allow these players in Asia and across the globe to access their growing games catalogue. Andrew himself knows the market well, having spent six years in China as a games developer and founder.
Given what Knock Knock has achieved thus far, we are very excited to support their vision and worldwide expansion. Congratulations again to Andrew and the Knock Knock team!
