Scalefast Raises $6 Million to Offload eCommerce from Game Companies
Not every company can be Amazon.com when it comes to taking online orders from gamers. So Scalefast is taking that job off the hands of game companies, and it has just raised a $6 million round of funding.
The three-year-old company has launched online stores for Bandai Namco, Sega, and Atlus, and it is showing that providing services to game companies is becoming a big business as the industry grows beyond $116 billion in revenues a year. What Scalefast does is a big deal as digital revenues are an increasingly big part of the overall pie in the game industry. The investors in the round include Benhamou Global Ventures, Adara, and B&Y Venture Partners.
Olivier Schott, the chief marketing officer and cofounder of Scalefast in Manhattan Beach, Calif., told GamesBeat that the company has scored exclusives providing a white label experience (where brands put their names on its online stores) with a variety of game titles such as Bandai Namco’s Dark Souls: The Vinyl Trilogy.
The idea is to make sure that a major game brand can handle the crush of orders that come in every second when preorders or orders begin for a major game. In the past, companies such as Amazon could handle such ecommerce demands, but many others could not. Scalefast can handle demand of about 200 orders per second, and it recently managed a client with 14 million orders from 240 countries, Schott said.
“We have a strong presence in the game industry, where they need to delight their fans but are not ecommerce experts,” Schott said. “They need to synchronize their launches worldwide. They need to manage customers and avoid leaks of secret information. It’s not their core business. They want to focus on their brand and their product while we handle the complexity of ecommerce.”
And Scalefast does it on a worldwide basis, allowing clients to scale their direct-to-consumer business faster. Most companies don’t have Amazon’s resources, expertise, data, team, infrastructure, hosting, security, fraud prevention, and ecosystem to properly serve their fans globally and overcome all hurdles in ecommerce.
Scalefast addresses technical, operational, contractual, and organizational challenges. For instance, some e-commerce sites often get the blame for accidentally exposing the confidential data about games that are about to go on sale. Hackers and other tech-savvy consumers find links buried within sites for upcoming games and leak them to the press. Scalefast has launched dozens of products on a last-minute basis with strict embargoes.
“It’s a really big concern for us, and we take leaks very seriously,” Schott said.
So Scalefast offers what it calls “commerce-as-a-service” and a revenue-sharing model. It also handles fraud, customization, analytics, tax computation and management, multiple currencies, multiple languages, and multiple warehouses. The company can handle more than 100 kinds of payment methods, including subscriptions and recurring payments.
Scalefast claims that its fraud prevention technology reduced fraud for one customer by 99 percent. Scalefast is constantly under attack by organized criminals, who often probe for the chance to steal Steam keys. The company also handles 70,000 customer support inquiries.
“When a gamer plans a weekend and wants to download and play a brand new game, he won’t wait until Monday if something doesn’t go right,” Schott said.
All of Scalefast’s services help increase publishers’ online revenue dramatically, Schott said.
Scalefast has been at it for four years, and its first major customer was Square Enix. Schott has been creating ecommerce companies for more than a decade. Now the company is managing more than 3 million orders in 2017, and its revenue has grown 1,000 percent in four years. The company has 65 employees.