We are thrilled to announce our investment into Sanlo, founded by Olya Caliujnaia and William Liu. They aim to ease the pain of inefficient and underbaked financial systems for companies by building an all-in-one financial platform to automate processes. Over Lvp’s decade-long history of investing into the game space and our collective 55 years of operational experience we have seen the need for the services Sanlo is building first hand. In building this platform, they are solving not one, but two hard problems for gaming studios as a start:
Harmonising disconnected and disjointed financial systems within companies (including but not limited to, tax rebates, marketing spend, game-level analytics, cash flow management and financial planning); and
Closing the funding gap for businesses in scaling their games and products when they are live in the market.
Both as investors and operators, we have watched operational areas such as product analytics and marketing be transformed by Amplitude and Adjust, automating and democratising marketing analytics and product engagement for companies. Yet the way companies interact with their finances (product or otherwise) remains stubbornly stuck in the past. But no more.
Traditionally, financial data has been kept in separate spreadsheets (if kept at all) requiring manual input to carry across and update, leading to information gaps and inefficient workflows: LTV models are often disconnected from product, marketing and cash flow analysis, and feedback between those areas can be painfully slow. This lack of consistency and transparency not only acts as a drain on time and growth, but can also lead to failures in diagnosing and addressing financially linked problems. Although many gaming start-ups rely on bookkeepers and contractors in performing CFO duties, they are transactional by their very nature; they are focussed on backward-looking auditing rather than forward-looking insights and actions, let alone in understanding a free-to-play business model. Then the problems can be compounded as a company scales and their game portfolio increases, leading to suboptimal decision making in assessing ROI.
We have been impressed by their vision but also their energy in validating these insights and broadening their community: they interviewed over 40 gaming industry founders, who all corroborated these same problems of inefficient and painful financial processes. Sanlo is therefore building a platform to consolidate those siloed processes, provide actionable intelligence, and allow teams to deeply understand and model their product and company financials. From there, Sanlo can provide the rocket fuel should a company’s game show traction and help pour that fuel onto the fire – enabling accessible and cheap capital for companies based on solid financial projections.
In helping scale their products, the financial opportunity for studios is clear. Only last week, Supercell extended their credit line to one of their investee companies, allowing them to draw down up to $180 million to help scale their game, Merge Mansion. Yet few companies (let alone SMEs) have this sort of access to capital, alongside the trust between the two parties that this game will be successful (being built through investment and close collaboration over many years). Sanlo can change that.
This funding gap represents millions, if not billions of dollars, in lost revenue every year due to limits to capital in UA spending and therefore maximising profit for developers (ensuring LTV=eCPI over a given payback period), and in the opportunity cost in waiting for months for traditional lenders to provide funds. Indeed, games are only the start – although first customers for this solution are mobile gaming studios, where these pains are most keenly felt – it is not too difficult to see how Sanlo’s platform might be applied to the wider app economy, through their deep understanding of products as a service and specialised knowledge of the mobile ecosystem.
Olya and William’s journeys leave them uniquely placed to explore this opportunity, having started their careers in gaming at Playfish (acq. EA) and gained experience building and operating startups in financial services. We are also equally excited to be joined by a stellar group of co-investors from the fintech and gaming scene including Index Ventures, Initial Capital, XYZ and Kristian Segerstrale. The founding team and its investors are indicative of Sanlo’s marriage of gaming’s agility with the leverage of fintech.
Sanlo reflects the games industry’s relationship with other verticals, often being at the forefront of design, business models and technology. Its willingness to experiment and reinvent itself continually means that there is a far greater willingness to take risks and execute on new ideas. We are looking forward to joining Sanlo on its journey, in upending both the way we finance games, but also the wider app economy.
If you would like to join Sanlo on their mission, they are looking to hire for a number of roles. Link here: https://www.notion.so/Careers-Sanlo-ac2d1e1055d246949d6b44c9eeed81ae.