Deal focus: Bud puts content creators first

Jenny Lee, a managing partner at GGV Capital, doesn’t care for all the hype around metaverse. Her decision to invest in Bud Technologies in late 2020, a 3D user-generated content (UGC) platform was rooted in the company’s game-tech credentials, rather than its association with the metaverse craze.

At the time, Bud was barely a year old, and its product was not market-ready. But Lee was convinced by the concept and by the two founders, Risa Feng and Shawn Lin, both 20-something engineers who previously worked for US social media start-up Snap. Their youth was considered an advantage.

“When you think about any new community, whether it’s a social platform or gaming, it tends to come from the new generation of users, because they have seen what the old platforms are like, and they are in search of a potential new platform,” Lee explained.

“The Snapchat background is very important because it’s a much younger community relative to the Facebook community. The fact that they have been in a US start-up that has gone through how the platform was built, how user experience is done, how technology can support front-end interaction, is a benefit as a first-time entrepreneur.”

While Bud’s product – based on easy-to-use no-code tools for creating personalised 3D interactive content – launched in China, global expansion was on the agenda from day one. Lee introduced the company to GGV’s global platform services team, which assisted with corporate structuring. The US and Singapore were chosen as international bases from which to target relevant markets.

Over the course of 2021, Bud raised a USD 4.5m Series A and a USD 15m extension, led by Source Code Capital and Qiming Venture Partners, respectively. The company recently closed a USD 36.8m Series B with Sequoia Capital India taking the lead. GGV, Qiming, and Source Code re-upped. Other Investors include ClearVue Partners, Northern Light Venture Capital, and NetEase.

Bud now has more than 15m original 3D works with users from 38 countries across North America, South America and Southeast Asia. Much like 2D offerings, the platform enables users to create their own world and visit those created by others. The difference is in user experience. In 3D, for example, when a character enters from the left, the sound of their footsteps comes from that direction.

“3D content is naturally cross-media and cross-channel. Now mobile is the mainstream hardware device, and Bud creates a perfect experience for users on mobiles. When the industry moves to VR [virtual reality] or AR [artificial reality], our content will have an advantage over 2D media,” said Feng [pictured, in virtual form].

Female appeal

At present, the creation process on Bud is executed through a mobile app instead of professional graphics software. There is no need to master programming or modelling techniques; users can simply rely on built-in geometric modules to build a complete set of 3D interactive scenes. They can then add text, graphics, music, and video to the scene and customise the lighting or background.

“When we talk about web3, metaverse or gaming, it’s long been male-dominated, or the preserve of very closed circles of gamers. What I want to do is to bring it to ordinary consumers, users of TikTok, Snapchat, and Instagram. And we are more gender-friendly,” said Feng.

Approximately 60% of Bud’s users are female, which Lee attributes to the company’s unique drawing style. It is described as very different from that of Roblox and appealing to females. Much of this can be traced to Feng and her background. A technology entrepreneur by vocation, she has a passion for drawing and devotes most of her spare time to artwork.

Bud is also uncomfortable with its metaverse tag. The company sees itself as a UGC platform first, and there is a belief that only UGC can provide diversity and openness to potential metaverse applications. The success of a UGC platform is based on creation tools and ecology.

“If you have a way to allow good content to be showcased and get attention, then you enable communities to be built based on interest,” said Lee.

Anyone involved in community building must address internal disputes. Bud operates a publicly accessible forum for users to exchange ideas and tensions arose when it emerged that some users had developed popular content based on materials created by others. The company responded by introducing a materials catalogue that automatically attributes resources used in each work.

“Gen Z and Gen Alpha really care about digital ownership. Our new feature has completely changed the dynamics of the community. Previous arguments have turned into thanks and praise for adopting someone’s proprietary material,” said Feng.

The next step is launching non-fungible tokens (NFTs) that better define digital ownership. Feng declined to disclose details, but Lee explained the likely role of NFTs in the future of gaming generally.

Under NFT structures, the tools, avatars, and characters a user buys or creates in one game are available in all others – like a pair of running shoes that can be worn anywhere. This cross-fertilised, metaverse-enabled world could open gaming communities to users anywhere, although Lee cautioned that getting there isn’t necessarily straightforward.

“Game design must change. Larger companies must endorse this approach to allow assets to migrate to other games. It goes against the current grain, which involves a closed ecosystem built by game companies over several years. It will be interesting to see if there are new start-ups or business model paradigms that can support it. We are doing a lot of work on this trend,” said Lee.

As to Bud’s future development direction, Feng is reluctant to define it. Whether the company evolves into a platform for gaming, social media, or something else, users will decide.

“Games and social networking are not isolated and independent, and the line between them has been blurring,” said Feng. “Over the next three to five years, we will continue to iterate our tools to give creators more freedom and space, so that they are able to create the world they have in mind.”

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• Topics
• Southeast Asia
• Technology
• Consumer
• Early-stage
• Singapore
• China
• metaverse
• GGV Capital
• Sequoia Capital
• Qiming Venture Partners
• Source Code Capital