Rob Duboff is Associate Director at Velo Partners. Velo invests and manages a portfolio spanning the global gaming and gambling industry across mobile, online, land-based, real-money, social, B2B and B2C assets.
Duboff joins us for Investor Connector at Pocket Gamer Connects Helsinki Digital 2020, a fringe event which pairs pre-selected developers who are seeking funding with investors.
Before the event takes place, we caught up with Duboff for his thoughts on investment and how the current pandemic has affected getting funding.
What’s the primary Investments focus of your company?
Velo is focussed on early stage, seed and series A equity investing. Our ideal investment candidates demonstrate strong early traction and a clear understanding of their unit economics and growth trajectory. We typically take minority interests in companies and do not provide specific project or game finance.
What are the key advantages for founders when they raise investment from your company?
Using our extensive experience in the gaming and gambling industry, we add strategic value as well as capital. For all our portfolio companies we see ourselves as company advisors to help support and build the businesses. We also consider follow-on funding in later rounds.
What kind of companies/projects are you interested in?
We are most interested in mobile casual gaming due to its wide reach, with around a third of the global population being mobile gamers. Considering our background in the space, we also like crossover genres that have ‘casino-like’ mechanics built.
We will, however, consider anything where the KPIs are strong, as we like to say, “the numbers do not lie”. We recently closed a round in a disruptive pre-revenue platform which we found attractive due to significant scalability and encouraging early-stage user-level KPIs.
What do you look for in a founder, or founding team?
I like to come away from a pitch meeting understanding the journey the founder has been on and have a clear idea of where they are going
It’s a case of “you know it when you see it” - a compelling founder with an interesting product. I like to come away from a pitch meeting understanding the journey the founder has been on and have a clear idea of where they are going.
Other characteristics we look for in founders are an appetite for risk, perseverance, adaptability and domain knowledge.
Did your investment activity or focus change because of Covid-19 pandemic? If yes how?
At the onset of the pandemic our initial priority was on our existing portfolio and ensuring they were adequately capitalised and supported through the crisis. Subsequently, we have closed several deals and it's back to business as usual.
Do you need a pitch deck, and if so, what information should a founder be sure to include to interest you enough to want to know more and have a meeting?
If a company is actively fundraising, a ‘current’ pitch deck is a must. Helpful details to include are background of product/industry, target market and size, management backgrounds, product market fit and unique selling points, monetisation strategies, unit economics, details of fundraise and use of funds, and existing investor base.
What do you expect to learn from a founder at the first meeting?
The most important thing is to find out about their journey and future plans for the business. It is helpful if a founder can share details on what makes their product and team unique, the current financials and metrics, and high-level details on the planned fundraise.
If a company is actively fundraising, a ‘current’ pitch deck is a must
Could you give any advice for developers or teams for pitching over video calls?
The work should start before the pitch call. Try to do research about your potential investor to make sure they will be a good fit and that your business meets their investment requirement needs.
Try to also make sure you go to every pitch call prepared and be transparent about what you are looking to get from the call.
How has the investment cycle changed as a result of the Covid-19 pandemic, typically, how long is it taking to close deals?
Things have very much returned to normal in terms of investment cycle. To provide context, we just completed a new deal in a two-week period from start to end so we can move fast if we need to.
The pandemic has separated stronger investment candidates from weaker ones, we are finding that weaker candidates are really struggling to get deals away right now.
What trends do you see emerging in games over the pandemic that are likely to persist post-pandemic?
I have seen a real push towards certain trends which will persist into the longer term such as the digitalisation of content, dominance of mobile, user-generated content, P2P skills-based gaming and requirement for increased social interaction in games.
It appears that the real winners during the lockdown period were the companies that were willing to aggressively take advantage of the lower CPIs to significantly grow their userbases cheaply.
I am also starting to see an increased emphasis on alternative monetisation methods. Developers can no longer rely on their core mechanisms being built around a single ad format or IAP and there is a strong emphasis on hybrid revenue streams to generate value in different ways.
It appears that the real winners during the lockdown period were the companies that were willing to aggressively take advantage of the lower CPIs to significantly grow their userbases cheaply.
Conversely, what trends do you think are short term?
In terms of the investment process, I really hope that we can start to go back to face to face meetings, as it’s helpful to meet founders face to face before we decide to invest.
Metrics will likely fluctuate, as countries come in and out of lockdown. It’s interesting that we are starting to see similar trends in Europe and North America as to what we saw in China, with install and retention levels beginning to normalise, while engagement has remained at higher levels. It was surprising to see download levels in genres such as hypercasual, puzzle and arcade games falling below Jan-20 levels in recent months. Albeit, in the medium to long-term expect these genres to continue to be some of the fastest growing based on installs.
Want to meet Rob Duboff at Pocket Gamer Connects Helsinki Digital 2020?
You could meet Duboff and many more investors online next month by signing up for Investor Connector at Pocket Gamer Connects Helsinki Digital 2020. So if you’re seeking funding, sign up here.
Please note: you can only sign up for the Investor Connector if you’re a registered attendee of Pocket Gamer Connects Helsinki Digital 2020. Book your tickets now.
We’re also allocating a limited amount of free passes solely for small indie developers, enabling them to meet with investors and publishers, and learn from the industry’s biggest names. If you think you qualify, sign up here.
