The average gamer spends eight hours and 27 minutes playing games, which represents a 14% increase over 2020. User-generated content platforms like Youtube, TikTok, Facebook, Instagram, Snapchat, etc. have led to the meteoric rise of new media creators. Allstar sits at the intersection of these two prominent trends. It’s a platform built for gamers that allows them to capture their favorite gaming moments, distribute this content, and build followings. Allstar is completely cloud-based without the need for any specialized or costly hardware and is currently offered as a freemium product with premium features coming soon. It currently supports CS:GO and Dota 2 with titles like Fortnite, League of Legends, Rainbow6, and Valorant in the roadmap.
AlleyWatch caught up with CEO and Cofounder Nick Cuomo to learn more about how his experience as a gamer led to the vision to turn gamers into content creators, the company’s strategic plans, recent round of funding, and much, more.
Who were your investors and how much did you raise?
The round was led by members of New York Angels.
Other investors in the round included venture capital firms Studio.vc, J-Ventures, and Emerging Ventures, as well as angel groups Harvard Business School Alumni Angels of Greater New York, Miami Angels, Gaingels, and Sand Hill Angels, and several individual investors whose professional experience span across companies like Twitch, Riot Games, and Zynga.
Tell us about the product or service that Allstar offers.
Recent data shows us that more than one billion people consume gaming-related content. But, less than three percent of gamers actually produce their own. Allstar aims to turn this dynamic on its head and empower all gamers to become content creators. By tapping into this audience, we aim to unlock the vast untapped potential in the widescale adoption of user-generated gaming content.
Our proprietary cloud technology provides an easy-to-use alternative to costly PC hardware and unintuitive software that affect both gamers’ wallets and their in-game experience. Beyond our growing network of users, our creative automation technology integrates with platforms like Discord, helping gamers share their content with friends and potential followers with little friction.
Recently, we partnered with TikTok to allow users of their immersive platform to sign directly into Allstar using their TikTok credentials.
I was a former pro-gamer. I competed at hundreds of tournaments, was highly skilled, and had my fair share of triumphs, but I was a relative unknown. Then, I took the time to create gaming content from my best moments. My movies went viral and practically overnight I was on the map – I had haters, fans, teams wanted to recruit me, the whole nine.
It was a life-changing experience, and taught me the power of content in gaming as both a creative outlet, a powerful marketing tool, and epically undervalued social collateral. Fast forward many years later including about a decade in the NYC technology scene as a designer, account director, and sales leader – I ran my own design studio, worked at a fast-paced digital agency, and rode the wave at a rapidly growing venture-backed SaaS.
It was then that I realized I was incredibly lucky. I was always creative and technical, had a fast PC, and lots of free time. Making gaming content was fun for me. But for most, making good gaming content is hard work. I realized this was a technology problem first and foremost, and that’s when we started Allstar.
What market does Allstar target and how big is it?
Allstar aims to elevate the gaming and competitive gaming (esports) market.
Statista recently valued the US video game market at approximately $65 billion.
Meanwhile, most projections put esports on track to surpass $1 billion in revenue in 2021, with Newzoo projecting things to hit $1.8 billion by 2022.
What’s your business model?
Allstar is a freemium product with yet to be revealed monetization. We plan to offer gamers a variety of hotly requested premium features as well as fun and accessible ways to enhance their gamer brand, personalize and optimize their content, and improve their overall content creation experience.
Our best and most successful creators will have an opportunity to share in the revenue we generate through our affiliate program. Our goal is to monetize in the frictionless and most endemic way possible for gamers by creating more value than we capture (and staying authentic to gaming in the process).
How has COVID-19 impacted the business??
The shift to working and playing from home has certainly broadened and deepened the reach of gaming. And, In the last eight months alone, Allstar’s user base has grown more than 10x and driven close to 200M impressions.
What was the funding process like?
We had originally planned to raise our funding much sooner but had to delay our round due to COVID-19. We reduced our burn and stayed scrappy until we were able to reinforce our growth story and the tailwinds in the market started to angle back in our direction (being a pre-revenue B2C startup as first-time founders meant the bar was very high for us).
We were lucky to connect with some amazing leads among the members of New York Angels who really understood our vision: our commitment to content quality and creative accessibility. They took the time to dig into the business and discover a shared level of excitement and conviction.
Once we had the lead, it was a question of timing and logistics. Demand grew sharply from there. Kickoff to close was about a 10-week process, with the last 4 weeks or so being a total whirlwind.
What are the biggest challenges that you faced while raising capital?
As with most founders, I think you realize very quickly that it’s an endurance race that really tests your grit and conviction. Ultimately, you are the better for it. It builds character and pressure tests every aspect of your vision, pitch, and actual business.
Beyond that, the timing was a little rough as the start of the year was busy for many investors. So, getting and keeping that attention was challenging. Once things started opening back up, it seemed like the capital markets were really moving. We had to work twice as hard to make sure we kept our process in motion.
Lastly, I think the competition was a catch-22. Investing in a startup with no competitors might feel comfortable (green pastures). But, it also calls into question the fundamentals of the opportunity. If no one else is there, why not? Having competitors isn’t necessarily the answer either as it creates a lot of murkiness and a need for extra diligence to cut through.
What factors about your business led your investors to write the check?
I think our investors saw the value around how we’re enabling gamers to create and deliver compelling content. The audience is certainly there and growing.
In the last year, we have seen our user base grow from approximately one dozen to thousands of content creators. Each month, this network produces tens of thousands of clips that earn millions of views — across our platform and the social platforms with which we’re connected.
What are the milestones you plan to achieve in the next six months?
Without getting into too much detail, we’re looking to lean into content quality and audience accessibility. We are working hard to build a first-of-its-kind approach to truly enabling any gamer regardless of expertise, hardware, or time investment to be creative and make content that’s really watchable. We want to connect that audience to a captive audience that anyone can access regardless of the following.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Mark Cuban was really the first investor to help us bring our vision to life. He has the right idea: fundraising is a stop along the journey, it’s not the destination. Raise as little money as possible to accomplish what you need. Keep your burn low, stay scrappy, and focus on being resourceful over resources. The more you sacrifice early on, the bigger the payoff can be. (We still have a ways to go before we’re doing victory laps – but that’s still the idea!)
Mark Cuban was really the first investor to help us bring our vision to life. He has the right idea: fundraising is a stop along the journey, it’s not the destination. Raise as little money as possible to accomplish what you need. Keep your burn low, stay scrappy, and focus on being resourceful over resources. The more you sacrifice early on, the bigger the payoff can be.
Where do you see the company going now over the near term?
This raise will help us enhance and innovate around our current product offering, integrate new titles onto our growing platform, and expand our ongoing hiring and partnership efforts and opportunities.
What’s your favorite outdoor dining restaurant in NYC
Before the pandemic, we were definitely indoor diners, and that answer would have to be hands down Aska in Williamsburg. But during COVID-19, the best outdoor meal we had has to be Lilia, also in Williamsburg. Their prix fixe rocks!