A South African startup’s ambition to be the platform of choice for game studios seeking users and monetization in Africa has received the backing of popular Silicon Valley investment firm Andreessen Horowitz (a16z), Google, and legendary American rapper Nas.
Founded in 2018, Carry1st allows game developers to publish and distribute their work, manage operations, and receive payments through multiple channels in Africa. In 2020, the company signed publishing deals for seven games from studios like US-based Tilting Point which creates Nickelodeon’s SpongeBob, Israel-based CrazyLabs, and Raketspel, a Swedish studio with over 120 million content downloads. Carry1st has also created and published one mobile game itself – a trivia app with over a million downloads.
The company’s strides so far have been with the support of investors like South Africa-based CRE Ventures which gave it seed money in 2018, and Konvoy Ventures which helped it raise $6 million in a Series A round last year.
For the next phase of its growth however, Carry1st has raised $20 million (an extension of the Series A, it says) and is looking to ride on the famed Andreessen Horowitz flywheel that has produced many successes in fintech and consumer internet sectors, from Facebook and Pinterest, to Coinbase and Stripe.
The last time a16z funded a startup operating in Africa, it was as part of the $170 million Branch raised in 2019. But while Branch’s mobile app has issued millions of no-collateral quick loans in Nigeria, Kenya, and Tanzania, the company is not classified as African, particularly in funding and fintech sector reports. (Branch co-founder Matt Flannery is indifferent about it.)
That is why a16z general partner David Haber describes Carry1st as the VC firm’s first investment in an Africa-headquartered company. “We see immense opportunity for the company to mirror outstanding successes we’ve seen in markets like India, China, and southeast Asia,” Haber said in a statement shared by Carry1st.
Haber mentions one company in particular: Garena, a Singaporean publisher and developer of online games. a16z is not an investor in the 12-year old company but cites it as a model for how Carry1st could deploy content management software to make online gaming more social in Africa.
But as with many conversations involving Andreessen Horowitz these days, there is a crypto angle to Carry1st’s appeal. Lucy Hoffman, a co-founder and chief operating officer at Carry1st, says the company is exploring “web3” options on the payments and gaming side.
“At this point we accept a range of cryptocurrencies at point-of-sale in our digital marketplace. There’s much more to come which we’ll announce in the future,” she tells Quartz.
a16z is one of Silicon Valley’s most pro-crypto investment firms, thanks to its $2.2 billion crypto fund. It has been criticized by former Twitter CEO Jack Dorsey and others for branding blockchain-related projects as “web3” out of purely commercial interests. But the firm says its stance is because it believes the next wave of innovation in computing will be based on decentralized technologies (pdf.)
That may well be the guide to discern future a16z investments in Africa, precisely where the decentralization overlaps with social aspects of the internet the way Carry1st does with mobile games and payments. The company’s raise comes the same week as Microsoft’s staggering plan to buy Activision Blizzard for $68.7 billion, a deal that puts Microsoft in the driving seat of the metaverse race.
Carry1st plans to co-create games with global gaming studios though Hoffman declined to name those involved. “Part of this raise will be used to level up our games portfolio through licensing, acquisition, and co-development,” she said.
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