Analyst: Kiip Provides Rewards-Based Gaming Experience

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The following is an excerpt from a report compiled by Michael Pachter of Wedbush Securities.

As the market for mobile and tablet gaming picks up speed, Kiip breaks in with a differentiated, rewards-based offering that presents a highly monetizable opportunity – by tying user, e-commerce, and advertising dollars together through a unique incentives-driven hub-and-spoke model. Co-founder Brian Wong predicts the so-called virtual economy could grow to $300 billion over the next 10 years as smartphone and tablet devices’ adoption by players increases to pay for games, make purchases, and redeem rewards by passing credit cards, bank accounts, even cash.

  • San Francisco-based firm delivering real-world rewards to mobile video gamers for their virtual achievements — from coupons for cappuccinos to discounts on clothing and cruises
  • Founded in July 2010 by CEO Brian Wong, CTO Courtney Guertin, and Creative Director Amadeus Demarzi
  • Offered 2 billion rewards to 70 million mobile users in 2013; rewards include digital coupons from Naked Juice, $20 Uber credits, and samples from Propel Water
  • Delivers 500 million rewards per month
  • Expanded platform into non-gaming app categories — fitness, food, music, productivity, and sports apps — which comprise half of company revenue
  • Fifty-five employees in San Francisco, New York, Chicago, London, Bogota, Vancouver, and Japan
  • Works with more than 2,000 app developers and 500 brands including Pepsi, Walt Disney, and Procter & Gamble; splits revenue with app developers.
  • Its partnership with Yahoo Japan in July 2013 marked the Japanese Internet giant’s first acceptance of a third-party service on its platform
  • Its users spend 68 percent more time in Kiip -enabled apps than in non-Kiip apps
  • $15.4 million in equity raised to date; backers include American Express, Hummer Winblad Venture Partners, and Verizon Ventures
  • CEO indicated revenue reaching “eight figures” in 2013, and anticipates profitability in 2014
  • Plans to enter Internet of Things (IoT) market next — users reducing energy consumption could receive cinema tickets from PG&E, for example

Michael Pachter is an analyst at Wedbush Securities.

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