Things happen: investing in Levellr and the Discord ecosystem

A surprising amount of what I’m currently doing is not public, which is historically unusual for me. Today I get to talk about a little of it.

Leaving SuperAwesome and Epic Games last year, I’ve continued to be intrigued by what was happening within the ecosystems of Roblox, Fortnite and Discord, namely:

• They’ve continued to grow (eyeballs, activity) and become the new social playgrounds for Gen Alpha/Z (Roblox’s results last week were a timely reminder of this demographic transition)

• They’re fostering a cohort of bootstrapped businesses doing increasingly interesting things (brand integrations, loyalty, education incentives etc.)

• They continue to be tricky for institutional investors to evaluate

• They’re definitely not going away

Even when you know where the future is going, it can be surprisingly tricky to invest into it. Max and I set up LFG Holdings¹ to look at investment opportunities in this space and we’ve evaluated at least fifty different companies over the last nine months or so. This eventually led us to Levellr, which Tom Gayner, Ben Barbersmith and Justin Gayner founded in 2021 to build tools which help companies manage and leverage their Discord communities. Since then they’ve bootstrapped their way to 65+ customers using the products, primarily across music and gaming (with lots of very well known names). 

A lot of conversations then happened which finally culminated in their announcement of a seed investment round which our LFG Holdings syndicate led and which also (excitingly) included many other excellent games investors like Mitch Lasky and Owen Mahoney. I’ve joined the board as Chairman². 

Dean Takahashi in Venturebeat had a nice little interview with Tom about everything.

The ‘why Levellr?’ question is maybe best answered with ‘why Discord?’. Discord continues to grow (now ~200m MAU), especially in interesting verticals (gaming, music, sport, crypto, AI) but fundamentally propelled by the Gen Z/Alpha demographic rotation which is still early³. Whereas the last social stack for consumers was some permutation of Whatsapp/X/Insta/Snap/FB, the next social stack looks something like Discord/TikTok/Reddit/Telegram/Roblox/Fortnite. It’s a longer list and it’s also arguably less functionally specific (while Discord isn’t a content creation platform per se, it’s beginning to see all sorts of developer experimentation in this direction). Irrespective of usage though, a direct consequence of this generational rotation is the professional community management retooling cycle has now started.

Also linked to this is the emerging trend of community being reevaluated in a more strategic light as a revenue driver. This is especially true in verticals like gaming where much organic growth has slowed down to single digits. Engagement, reactivation and superfan management in places like Discord has a real revenue growth vector attached to it. The future of community in major companies is probably more aligned with the revenue team than the marketing team. Levellr is building the enterprise tools to make that happen for Discord.

There are some very interesting things cooking here.

1. I’ll write a bit more about what we’re doing with LFG Holdings soon

2. I’ll probably also write about founders-as-chairs too at some stage.

3. Yeah, also this.