Niccolo De Masi, the person behind the hit cellular sport Kim Kardashian: Hollywood, has launched a “blank check” preliminary public providing (IPO) firm that’s attempting to find the following massive cellular app.

De Masi just lately launched a particular goal acquisition company (SPAC) on the New York Stock Exchange. In that transaction, traders put him in control of an organization with $200 million, and De Masi will get to resolve what to accumulate with all of that money.

It’s a method of going public with out the entire trouble. Investors put their cash right into a shell firm, and the administration of the corporate — De Masi and chief monetary officer Harry You — will purchase a number of firms. De Masi mentioned they’ll concentrate on the following massive cellular app, one thing like TikTook or no matter they’ll discover, after which attempt to develop it into one thing big.

De Masi continues to be chairman of cellular sport firm Glu Mobile, which nonetheless operates Kim Kardashian: Hollywood, which broke open the superstar cellular video games market when it debuted in 2014. He then began signing up various A-list celebrities. Some video games like Restaurant Dash with Gordon Ramsay did nicely, however others reminiscent of these for Britney Spears and Katy Perry bombed.

De Masi gave up the CEO title at Glu in 2016, and now he’s diving into the SPAC, dMY Technology Group as CEO. You serves as chairman. De Masi spoke with GamesBeat in an interview final week, and right here’s an edited transcript of our interview.

Former Glu CEO Niccolo De Masi is on the prowl for mobile app acquisitions

Former Glu CEO Niccolo De Masi is on the prowl for mobile app acquisitions

Above: Niccolo De Masi is CEO of dMY Technology Group.

Image Credit: dMY Technology Group

GamesBeat: Can you decide me up after leaving Glu and transferring on from there, attending to the place we’re immediately?

Niccolo De Masi: I by no means left Glu within the sense that I’m nonetheless the chairman there. I used to be the manager chairman for 3 years. I’ve completed my 10-year anniversary at Glu. That was January 5. But I’ve been much less operationally concerned for the previous month or two, and never the CEO for the previous three years or so.

I’ve performed two {hardware} companies within the meantime, each within the cellular or IOT area. You’re conscious of the saga with Andy Rubin for a 12 months or two, after which I spent a 12 months or two on the board of this enterprise, Resideo Technologies, which was the spinoff from Honeywell Homes. I’ve performed some attention-grabbing stuff, however I by no means stepped off the board at Glu, and I stay actively concerned there. My coronary heart and soul has at all times been in cellular, and it nonetheless is. That’s why I’m doing this cellular app SPAC.

GamesBeat: How did this dMY get began?

De Masi: I’ve been fascinated about doing this, and also you would possibly discover this unbelievable, since about 2007. I bought my first public firm, a cellular music enterprise within the U.Okay., in February 2007. That 12 months I gave actual thought to doing one thing like this. Obviously I went to Hands-On Mobile and went to Glu as an alternative. But during the last 18 months, two years, I’ve been studying significantly about how to do that. That’s a combination of speaking to banks and speaking to potential companions, and likewise refining my concept.

What we’ve come out with is exclusive. It’s uniquely operationally centered. What makes the distinction from each different SPAC out there may be that–you’ll discover this humorous, however not like most SPAC ventures, I’m not a man who used to do stuff. I’m a man who’s doing stuff. I think about myself successfully–if not the inventor, a co-inventor of convey free-to-play as a enterprise mannequin to cellular gadgets in 2009-2011. Certainly on Android, and definitely with motion video games. Same with issues like rewarded video, when you bear in mind the times of Tapjoy and Flurry. We have been proper in the midst of all of that.

The actuality is, my working expertise is latest and related. I’ve been holding off for the final two or three years from taking any unbiased board seats. The motive for that’s I needed to ensure that my universe of potential investments and SPAC companions was maximally broad. I’m trying to construct a $10 billion enterprise by beginning with a $1 billion enterprise, versus–at Glu we began with a $30 million market cap, which was a terrific experience, however clearly we grew from there to a billion or so. This time round I wish to go from $1 billion to $10 billion.

I’m trying to do it in gaming adjacencies. I’m not attempting to do that within the sport area, imagine it or not. I feel there’s much more competitors within the sport area than there may be within the game-adjacent area.

Former Glu CEO Niccolo De Masi is on the prowl for mobile app acquisitions

Above: Kim Kardashian: Hollywood provides you the prospect to play the sport of fame.

Image Credit: Glu Mobile

GamesBeat: Why is SPAC the great method to do that? Are there different choices in addition to doing SPAC, or is it the very best deal on the town for you?

De Masi: I’m most likely the one individual you’re going to speak to who’s been doing cellular stuff and public firm stuff for nearly 20 years. I’ve been doing cellular content material because the days when the black and white Nokia snake sport in your futurephone was innovative. Or the times when modified ringtones have been innovative. The actuality is, my first public firm listed in November 2003. We’re right here in 2020 and I’ve been via 4 public firms, a handful of personal firms. I’ve been on the board of a run. When you concentrate on my experience, it’s the mix of public firms and the cellular ecosystem.

I might have gone to lift my very own non-public fairness fund or one thing like that. But there’s much more cash within the non-public markets than there may be within the public markets. I additionally suppose there’s been an entire paucity of public firm formation. Not simply previously 5 years, however exterior of gaming and relationship, there’s actually by no means been a lot that’s occurred within the cellular app ecosystem. There’s been no public firm formation.

The actuality right here is, within the final three years, various companies that have been too small have now reached the stage the place they might be viable public firms, as a result of they’re rising shortly. They have been too small a number of years in the past, and somewhat bit comes right down to the truth that two or three years in the past — I really feel there was a wave in Silicon Valley, earlier than Slack and Spotify and Uber and Lyft. “The cool kids will stay private forever.” I feel that’s altering now. I’ve had a whole lot of founders contact me about how they’ll do an unconventional IPO. I present that successfully. I present an unconventional IPO for individuals who wish to do one thing between a quasi-direct itemizing and a conventional IPO. I additionally present capital desk cleanup for anyone who’s worn out by having their A spherical traders misaligned or completely different aligned than their C spherical traders, which regularly occurs.

Because my working expertise comes from free-to-play gaming, I’m significantly bullish on the power so as to add worth to firms which might be from the gaming-adjacent area. If you’re in training or well being and wellness, there’s a whole lot of apps on the market which might be sizable, however they don’t have the identical monetization experience. They don’t have the identical distribution and advertising experience that I’ve. Adding one plus one equals three fairly shortly, whenever you convey complementary experience like that.

Former Glu CEO Niccolo De Masi is on the prowl for mobile app acquisitions

Above: Restaurant Dash With Gordon Ramsay

Image Credit: Glu

GamesBeat: As far because the amount of cash right here, I discover that a few of these gaming firms are promoting for very excessive costs. Storm8 bought for $300 million. That’s somewhat loopy for a 70-person firm.

De Masi: Who purchased that and what was the EBITDA, although? Supercell has solely 300 folks. Let’s do not forget that WhatsApp solely had 20 or 30 or one thing loopy like that. People isn’t a sign. But I agree with you. There’s competitors within the gaming area. That’s why I’m wanting on the gaming adjacency sectors. There are recognized, precise patrons in a whole lot of instances. In a whole lot of these classes, they’re type of quasi-hobbies, which is smart within the app ecosystem, however they don’t have precise patrons. If they’re not going to IPO, what’s the trail to liquidity?

GamesBeat: When you consider adjacency, what’s the description of the type of firm there? Is it, say, analytics firms? There are issues like esports know-how firms on the market.

De Masi: There’s so much within the training area, so much within the well being and wellness area, so much in health. Advertising fashions, there are nonetheless advert networks on the market doing nicely. There’s a whole lot of market. Look at Andreesen Horowitz’s market high 100. There are most likely a number of dozen of these firms that will match our standards. There’s fintech as nicely. Let’s not depart them out.

GamesBeat: When you speak about beginning at a billion, do you imply that? Or are you really fascinated about utilizing the $200 million at hand, versus going out and discovering $1 billion to go purchase one thing? What dimension of urge for food do you could have right here?

De Masi: It’s a billion, plus or minus. We might do $1.5 billion. We might go as little as $600 or $800 million. But when you have a look at most SPAC IPOs like Draft Kings, Virgin Galactic, Dave Cote simply did one, the previous Honeywell CEO, all of them have a tendency to purchase issues which might be 5 instances or larger the money they raised. That’s the rule of thumb. Five instances 200 is a few billion. It must be analogous when it comes to the upfront liquidity versus what’s getting rolled, analogous to IPO. People don’t wish to see all the cash coming off the desk, if that is smart.

We have Goldman Sachs. You’ll be exhausting pressed to seek out different SPACs which have Goldman Sachs. Dave Cote was CEO of Honeywell and Goldman was there along with his SPAC as a result of he was additionally operationally related. They appear to love that at Goldman as a theme. Goldman Sachs analysis is far coveted. We have the power to draw a nice-sized enterprise right here, as a result of Goldman gained’t usually do an IPO of a billion-dollar enterprise. They’re searching for $3-Four billion market caps. It’s a fairly neat factor to have the ability to provide our potential goal companions.

Former Glu CEO Niccolo De Masi is on the prowl for mobile app acquisitions

Above: After the massive success of Kim Kardashian: Hollywood Glu tried to repeat the method however with out fairly the identical stage of success

GamesBeat: Is anyone else working in the identical area? Someone who has one other SPAC?

De Masi: We’re the primary cellular app SPAC. We’re definitely the one cellular app SPAC you’re ever going to seek out by somebody who’s run, I don’t know, two, three, 4 public firms within the cellular area. Lots of individuals have run non-public sport and app issues, however they don’t know easy methods to run public firms. This is a fairly distinctive proposition within the market, and that’s why Goldman took it on.

GamesBeat: As far as territories, are you beginning within the U.S.? Are you going to look worldwide for alternatives?

De Masi: I’m centered on U.S.-domiciled companies. We might do western Europe. But we’re not doing something unique. There’s greater than sufficient alternative for companies which might be most likely not solely U.S.-domiciled, but in addition majority U.S. income.

GamesBeat: Does this complete coronavirus state of affairs have an effect on something right here? We have a dip within the inventory market once more.

De Masi: Here’s the excellent news. When I have a look at my two public boards, Glu and dMY now, they’re each comparatively — dMY shouldn’t be down a lot in any respect, as a result of it trades somewhat over money. Glu is just down 20 cents. To be sincere, I personally imagine the rationale for that’s that each Glu and dMY profit from my experience having constructed public firms within the cellular ecosystem on the again of not solely the dot-com recession, but in addition the “great recession” of 2008-2009.

One of the stuff you discover is, similar to — I’m positive you noticed the headlines from the FT about how in China, coronavirus signifies that Tencent’s having a extremely good month, quarter. What I’ve at all times discovered is that these companies do very nicely. I wouldn’t say they’re recession-proof, however they’re extraordinarily recession-resistant. When folks in the reduction of spending on issues, what they have a tendency to do is that they nonetheless protect it for smaller-priced, high-value leisure. Gaming has a really low value per hour of leisure. Same for just about each app on the market. Everyone has a pastime. As Steve Jobs used to love to say, there’s an app for that. Every pastime has an app.

I’m bullish that we’re very well-positioned. If there’s a recession, if there’s a corona factor, I feel that is one little bit of the economic system that does arguably greatest. Small microtransactional or ad-funded fashions. We’ve seen that bear out. Glu was totally constructed on the again of the nice recession. I’m very comfy about that.

GamesBeat: It looks like there’s this impact in China proper now, folks staying house and taking part in video games.

De Masi: Exactly. That’s what occurs. In the nice recession, folks cancelled their trip to Hawaii and their mother and father gave them 20 bucks to spend on cellular apps for the weekend. I’m very comfy that we’re in place there.

Furthermore, I’d say that — I don’t know when you noticed it, however our inexperienced shoe bought exercised immediately. There’s at all times a 15 % overallotment choice. We’ve really raised $230 million, not $200 million. That’s on the again of the truth that we have been 5 instances oversubscribed on Thursday and Friday. There was a whole lot of demand for this proposition. Having the money within the financial institution, if issues get difficult — having the cash means we have now a whole lot of leverage in terms of who we’re partnering and negotiating with. If capital turns into scarce, I’ve already bought the cash.

GamesBeat: The flip aspect is that it doesn’t harm if issues generally develop into inexpensive to purchase.

De Masi: Exactly proper. That’s what we did at Glu for therefore a few years, as you’re nicely conscious. We made greater than a dozen acquisitions at Glu.

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