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Sequoia Leads $4.7 Million Investment in Humble Bundle (YC W11)
- sahillavingia 16y agoThis was the one YC W11 company that didn't present at Demo Day because of a no-shop clause.
- d0m 16y agoCan you explain more?
- sahillavingia 16y agoWhat do you want me to explain?
- bostonvaulter2 16y agoWhat is a no-shop clause? I didn't even realize that the Humble Bundle was a YC company.
- sahillavingia 16y agoNo-shop means you accept a term sheet that includes a clause that stops you from talking to other potential investors.
- swalkergibson 16y agoI realize this is straying off topic, but why would an entrepreneur hamstring him/herself by agreeing to such a clause? It appears to me that such a clause benefits the VC in a big way, but puts a significant amount of undue pressure on the entrepreneur. How am I supposed to know if I am getting the best deal if I am barred from taking the offer into the marketplace?
- andrewparker 16y agoYes, it is a pro-investor clause. You would agree to it in the situation where you feel you are satisfied with the term sheet (and who its from) and are ready to commit.
- polvi 16y agoCongrats guys!
- matthew-wegner 16y agoWorth mentioning there's no official confirmation yet, but this is the filing in question: http://www.sec.gov/Archives/edgar/data/1518293/000151829311000001/xslFormDX01/primary_doc.xml http://www.sec.gov/Archives/edgar/data/1518293/0001518293110...
- AndrewMoffat 16y agoUnrelated to the story, but interesting: According to a counter on its website, Humble Bundle has generated over $730,000 in sales on 147,000 bundles ($4.96 per bundle). Linux users pay the most at $11.72 per bundle, Mac users are in the middle at $6.31 and Windows users bring up the rear at $3.95. Linux users clearly want games. I dropped $10 myself for the Frozenbyte bundle.
- bostonvaulter2 16y agoYeah, I dropped $11.37 for it as a Linux gamer.
- alanfalcon 16y agoWhy not $13.37?
- bostonvaulter2 16y agoHaha, you're right. I was actually mis-remembering. I did spend $13.37.
- pitdesi 16y agoThe slider defaults to tip Humble Bundle 15%... seems fair. We implemented something similar at Kiva where the users could optionally donate 10% but it was defaulted in... 85ish% of people made the donation. Who pays for payment processing? The slider indicates that 100% of the money goes either to the developer, charity, or Humble Bundle.
- matthew-wegner 16y agoTheir "Humble Tip" was set to a lower default on the Humble Bundle #2, their last multi-developer bundle. Interestingly, one of their stats at their Independent Games Summit talk was that the average tip % went up from the default...
- lyime 16y agoThey use Paypal, Google Checkout or Amazon. 100% of the money after the fees have been taken out.
- pitdesi 16y agoIt's misleading because if you put in $100 and say "all to developer" it says that $100 will go to developers. Not a big deal, it's just easier to present the data this way even though it isn't strictly true.
- rhygar 16y agoI'm puzzled. What are they going to use all that capital for? The business already seems quite successful and profitable.
- rottencupcakes 16y agoEven rounding up to $5M in sales with the 3 humble bundles, a 5% commission comes out to $250,000. Factor in hosting costs and salaries, and that's not really enough money to build out a business.
- rhygar 16y agoRight, but why do they need a huge influx of cash just to keep growing an already successful enterprise? Especially when the founders have to give up some control over the company to get it. 3. Profit! 4. Raise VC Money 5. ???
- rms 16y ago5) Build out a sales team
- bazookaBen 16y agothese guys are smart, they're probably going to use social media,social buys,etc to gain leverage over existing indie distribution channels. I also smell a partnership with a big gun (like Xbox Live Arcade)
- JofArnold 16y agoThat's a common question in situations like this. Essentially they have a scalable business model, so rather than waiting a few years to grow to size organically they can jump to that stage in the business much earlier. Sure, they give up some control, but Sequoia are awesome folks and they massively de-risk the business this way.
- InclinedPlane 16y agoThey plan to grow the company (and revenues), of course. Valve runs a somewhat similar business with their Steam content delivery and promotion system. A lot of indie games are on Steam and "Steam sales" are somewhat similar to the humble bundle mechanism. There's certainly a lot more money in the indie games market than the humble bundle has brought in.
- guiseppecalzone 16y agoAwesome, nice work guys!
- haydenchambers 16y agowhat exactly is the problem humblebundle solves? a slider to balance payments?
- sk_0919 16y agoHonest question - can someone explain the value proposition for investors and potential business models for humble bundle?
- hristov 16y agoBasically, the value proposition seems to be something like Groupon. Humble Bundle will become a place known to offer low priced games. People will go there in order to find low priced games. The fact that so many people go there will attract game developers to offer their games there at a huge discount hoping to get their name out and get some traction. I am not sure it will work but I am pretty sure this is their plan.
- patio11 16y agoDo you think "low-priced" is a necessary part of the offering? I'd be strongly tempted to emphasize the other parts (aesthetic, Rage Against The Machine, etc), deemphasize "pay however little you think is fair", and walk up the number of sales in the $40+ bucket.
- aberkowitz 16y agoHumble Bundle is becoming the go-to place for platform agnostic independent game sales. Imagine what would happen if Humble Bundle, Inc. became the defacto, cross-platform Steam competitor. On top of that, Jeffrey Rosen's connection into the gaming industry puts him one step ahead of any potential competitors.
- eoghan 16y ago"The big question, of course, is how Humble Bundle itself plans to make money. Buyers can 'tip' the company when making purchases, but clearly that isn't the business model." Why not? It seems pretty smart to me. The average purchase price is $5.
- deleted 16y ago[deleted]
- maguay 16y agoI saw this on Twitter earlier, and quite seriously thought it was a joke at first. Seems incredible they would raise funding too; I would figure they could grow just on revenue. I'm starting to think you could get investment for almost anything right now...
- dasil003 16y agoI love the humble bundles, I bought all 3, but after taking VC money shouldn't they drop the "humble"?
- mvalle 16y agoThat's what I thought. It's not very humble anymore is it?
- gobongo 16y agoIndeed! This company seems to be gettin' a bit too big for its britches! Somebody oughta knock 'er down a peg or two!
- nhangen 16y agoI think the humble mostly refers to the games/apps inside the bundles. They might be indie hits, but they aren't mainstream. That's the way I took it at least.