The Pitch - First Meta
First Meta
The Pitch: First Meta is the first real provider of financial services for virtual economies. Virtual economies are real value markets that have recently emerged from online, fully interactive, 3D social virtual worlds like Second Life as well as Massively Multiplayer Online Games (MMOGs) like World of Warcraft.
Product: In July 2007, First Meta launched the world’s first virtual-currency (virtual$) credit card in the virtual world Second Life. It is now launching a cross-virtual-world currency exchange, along with payment and banking products that span real and virtual economies.
Who: Aileen Sim, Co-founder & COO; Douglas Abrams, Co-founder & CEO; Cyph Ho, CTO; Joy Cheok, VP Sales and Marketing.
Request: USD 1.5 million in equity investment to fund expansion
What’s the company’s product and what’s innovative about it?
Aileen: “Our products are a virtual currency credit card, savings accounts, cross-virtual world currency exchange and virtual/real economy payment and banking products. Our innovation is that we bring real world financial services to virtual economies and provide our customers with direct linkage between the virtual and real economies.”
What’s the problem you are solving for customers?
Aileen: “We allow our customers to leverage and grow their virtual wealth and to unlock the value of their virtual currency in the real economy.”
Who is your customer and how fast is your market growing?
Aileen: “Our customers are virtual world users and gamers, merchants, and publishers. Virtual economies are currently valued at more than USD 2 billion and are growing at an estimated 50% per year. “
Who is your key competition and what’s your marketing strategy?
Aileen: “Potential competitors include virtual asset trading platforms, game economy resource management systems, virtual world publishers and real world financial institutions. Our market positioning is as the only company in the world whose core business is virtual world financial services. This makes potential competitors into likely partners.”
What is your sustainable competitive advantage?
Aileen: “Our sustainable advantages include partnerships with virtual operators, synergies among our products, the network effect of operating in multiple virtual worlds, our information advantage as an early mover, our internally-developed proprietary intellectual property and our strong branding as the leading player in this space.”
What makes your team the best one to execute this business?
Aileen: “Our management team has a unique combination of experience and expertise in virtual world commerce, real world financial services, IT, payment processing management and operations. The team has already proven its ability through its accomplishments to date.”
What type of traction have you achieved so far?
Aileen: “First Meta has raised USD1.4 million in angel equity investment and non-dilutive grants from the Singapore government. We currently have two products in the market, and are the only bank approved to operate within the virtual world, Second Life. The company has received international press attention from the likes of TechCrunch, BusinessWeek, CNet and The Times. First Meta was named one of the top 200 fastest-growing technology companies in the world by Red Herring.”
How are you going to make money, how much are you projecting you can make?
Aileen: “Product revenues come from usage and transaction fees, spreads
on currency exchange, and interest revenue from credit products. All virtual currency revenues are monetized either via our own or third-party exchanges. We are projecting USD 120 million in revenues by 2012, at which time we plan an exit for investors via a trade sale to real-world banks, credit card, payment or media companies looking to enter virtual economies.”
Investment summary:
Idea: Highly innovative, strong value proposition, and a fast-growing market.
Market potential: A USD 2 billion dollar market forecasted to grow to USD 30 billion by 2011.
ROI: Projected at 135 times in 2012.
Opportunity: A chance to invest in the market-leading bank in a developing USD 2 billion economy, growing at 50% per year – the Citibank of the virtual world. A clear exit opportunity through acquisition within 3-4 years.
This month The Pitch is written by Singapore-based venture investor Douglas Abrams, Managing Director of Expara, Expara IDM Ventures, and Extream Ventures.
