Tipping has become a popular monetization tool on social media, but a San Mateo startup is giving users a chance to make some moolah when interacting with celebrities and other content creators.
VersusGame is a mobile app that, much like TikTok, shows users an infinite loop of videos. The difference is that every video has a two-question poll about a future event — for example, whether the NBA finals between the Golden State Warriors and Celtics will be six or seven games.
Users can make predictions for free or place small wagers on the outcome, such as $1 or 100 in-games coins, with one coin equaling one penny.
BuzzFeed has already jumped on the platform. In one video, BuzzFeed asks users to predict whether Netflix will release a trailer for season two of “Squid Games” by July 1. A correct prediction will payout between $1.60 to $175, depending on the initial wager, which can range from $1 to $100.
VersusGame takes 12.5% of a user’s winnings and shares a portion of that with verified creators.
Founder and CEO Johny Vitti created the parent company, MrktStar Inc., in 2016 and launched the VersusGame app a few years later in 2019.
On Wednesday, VersusGame announced a $25 million Series A that included APEX Capital, Brightstone Capital Partners, Feld Ventures, Gaingles, Kombo Ventures, Lifeline Ventures, Moonshots Capital, NewView Capital, Plus Eight Equity Partners, Republic Capital, TribeJoint Amenti and fashion retailer Revolve.
The company's individual investors have also included LinkedIn founder Reid Hoffman, influencer David Dobrik, former NBC Universal Television chair Jeff Gaspin, “Shark Tank” producer Mark Burnett, NBA star Kevin Durant, the Winklevoss twins and Will.i.am.
Conversations can be a marketplace but “the only path to do something about that is on Wall Street. And so, I thought to myself, ‘Wow, we're really good at spending money as consumers, they're really good at taking our money, but we're the ones using all these products, brands, apps, services. Why aren't we getting a piece of the funds, too?”’ Vitti told me. “So that was the true genesis behind it.”
The company places limits on the amount of times a user can play and how much they can spend in 24 hours, though Vitti told me that nobody has hit those limits.
"We have a lot of safeguards in place. I come from the have-not world. So I created out of the need to have," Vitti said.
And while the app is available to anyone over 13 years old, only users who are at least 18 years old can place wagers.
Competition for our attention on social media has skyrocketed over the past several years. While Facebook dominates the social media landscape with 3 billion users worldwide, Snapchat and TikTok have ratcheted up the stakes in a fierce battle for content.
The creator economy is estimated to be worth at least $20 billion, according to this report from Bloomberg News, and possibly five times more than that, according to this report from research firm CB Insights.
YouTube has reportedly paid content creators around half of the ad revenue generated in videos since 2013, according to Variety. And in 2020, TikTok announced a creators fund that would likely reach $1 billion through 2020. A few months later, Snapchat announced that it would spend $1 million a day on creator payouts, apparently indefinitely, the NYT reported at the time. The following year, Facebook followed suit and said it would spend $1 billion to court influencers and creators through 2022.
While VersusGame is a mobile-first experience, its videos can be embedded in third-party apps and on desktop. Users can even share videos from the app to SnapChat.
The company currently has around three dozen employees and Vitti wants to hire eight to 10 more people this year, though it has been challenging to compete for top talent.
"It's so hard to hire right now," Vitti said, because there are so many other companies in a position to offer higher counter-offers. But also, with the rise of remote work and covid, "people are not really telling the truth all the time with what their skill sets are and what's going on and you find out after" hiring them. "There's this weirdness right now in the market."
Raising capital wasn’t too difficult, though.
"We were oversubscribed tremendously. We had some good investors, good track record, metrics and growth. So, we were in the right place at the right time," Vitti said. "To be fair, though, we ended this and then the poop hit the fan… we got lucky."
The company says it has more than 800 influencers, celebrities and media partners producing content including BuzzFeed, Billboard, ESPN, UFC and AMC's “The Walking Dead.”
