Startup that's developed 'mobile arcade' raises $1M

A Clayton-based gaming startup, which has developed an app described as a “mobile arcade,” has raised $1 million to advance its technology.

The startup, Playbite, said its funding round was led by Silicon Valley-based venture capital firm Grishin Robotics. Additional investors in the deal included M25, Tundra Ventures, Capitalize VC, Everywhere Ventures, Magic Fund and angel investors.

Playbite has created a mobile app that includes more than 40 “fun and simple” games and is designed to be a mobile arcade. Its app includes both single and multiplayer games, with users able to win prizes, similar to an arcade. Co-founders of Playbite include:

The co-founders initially began developing games in 2018 before formally launching Playbite in May 2022. The $1 million financing for Playbite marks its second round of funding. It had previously raised $700,000 in a pre-seed funding round led by M25, a Chicago-based venture capital firm that invests in early-stage companies.

Katie said in an interview that Playbite, with its arcade model, wants to be a “centralized place” for mobile games. With a library of games available to users, Kafie said Playbite’s operating model is similar to what Netflix is for television shows and movies, and Spotify for music and podcasts. He said that offering a collection of games and the ability to win prizes, such as gift cards and toys, differentiates Playbite from stand-alone mobile games.

Playbite is free for consumers. The company said it generates revenue from advertisements on its platform, in-app purchases and a subscription program. The app currently has several hundred thousand monthly users, Kafie said. He declined to disclose a specific figure for monthly active users.

Playbite plans to use its fresh funding to enhance its technology, with a focus on expanding the number of multiplayer games available on its platform.

“One important thing we’ve discovered and keep hearing from our community is how much more exciting it is to play with other humans,” Kafie said.

Kafie said Playbite has recently added its first multiplayer games and is working to modify existing games to allow for multiple players at the same time. He said the startup will also focus on allowing its users to also create on the platform, with the ability to customize games or possibly create their own.

Playbite has five employees, as well as one contractor based in Honduras. Kafie said the startup, with its offices at 222 S. Meramec Ave. in Clayton, has prided itself on being able to operate with a lean team and budget in its early stages.

“I think it’s the Midwest in us. We get a lot done with very little,” he said.