IMVU Raises $35M in Funding - Netease and Others Invest

The distinctions between social media platforms and online games are becoming less clear, and major internet companies are recognizing this trend. NetEase, China’s second-leading gaming firm after Tencent, is part of an investor group that recently provided funding to IMVU, a California-based social network centered around user-created avatars.

Structural Capital, located in Menlo Park, was among the other institutions participating in this $35 million strategic investment round. Since its establishment in 2004 by Eric Ries, the author of “The Lean Startup,” IMVU has secured over $77 million through five funding rounds. The company has not revealed its valuation following this latest investment.

This new capital will be allocated to the advancement of IMVU’s product line and follows a recent organizational restructuring. A new parent company, Together Labs, was created to manage IMVU – where individuals can design virtual environments and interact with others using personalized avatars, a service now often viewed as a platform for meeting potential partners – alongside Vcoin, a system enabling users to purchase, exchange, earn, and convert IMVU’s digital currency into traditional money; and other virtual offerings.

Daren Tsui, CEO of Together Labs, explained to TechCrunch that NetEase, known for its highly successful and long-lasting massively multiplayer online games in China, sees parallels between its own business and IMVU’s operations.

“IMVU is home to one of the longest-running and most dynamic metaverses globally, with a particularly youthful user base. We share similar business principles and possess complementary expertise, making a partnership a logical step,” he stated.

Established in 2005, NetEase currently offers a variety of services, including a news portal, a music streaming application, educational resources, and video games that compete with Tencent’s offerings. While it has made several minority investments in companies outside of China, its investment activity is not as extensive as Tencent’s.

A representative from NetEase declined to provide a statement regarding the investment in IMVU.

According to Tsui, this collaboration will enable the virtual networking company to utilize NetEase’s expertise in game development and engineering, as well as benefit from NetEase’s understanding of international market strategies as Together Labs prepares to launch new products, including one named WithMe.

In 2020, IMVU experienced significant growth, reaching over 7 million monthly active users and witnessing the creation of 400,000 products each month by its user community. The platform is currently available in over 140 countries and is “continuously seeking to expand” into existing markets, including Asia, where it already has a Korean-language version of its app, as noted by Tsui.

“Given IMVU’s recent growth, the introduction of VCOIN, and the development of the WithMe platform, we determined that the time was right to consolidate these products under a new organizational structure, reinforcing our dedication to fostering genuine human connections within virtual environments,” the chief executive explained.