[Updated: The father, Karl, has responded to an inquiry. We've updated below. See comments too.]
A Silicon Valley company co-founded by a 12-year-old has just raised $6.5 million in venture capital.
PlaySpan, based in Santa Clara, Calif. says it offers game publishers a technology that lets users make payments and shop for other items. It calls itself the first “publisher-sponsored in-game commerce network.”
Arjun Mehta, a 6th grader, says on his Web site that he is passionate about software that can make the game experience more “rewarding,” and that he started the company last year in his garage. He paid for it from earnings made from selling online game items he won from quests he fought.
This has got to be downright depressing for most budding entrepreneurs, most of whom strike out while pitching investors for funds, even in their 30s or 40s.
This is the second company led by a middle-schooler of south Asian heritage. In May we wrote about 13-year old founder and chief executive, Anshul Samar, who runs an educational gaming company.
The difference is that PlaySpan is making all the sounds of a traditional silicon valley company, right down to the slick web site and a press release manufactured by a PR firm that is barely decipherable. Mehta will probably learn to write his own press releases within a year. While the “company” section of the site profiles only Arjun, however, a closer look at the press release reveals that the actual CEO is Karl Mehta, which we presume is an older relative — so there’s adult supervision at least.
[Update: Rafat has some thoughts about this in comments below, suggesting this is a gimmick. We're awaiting response to questions we've posed to the company, and should note that the PR person who responded to us stressed that Arjun prefers email correspondence.]
[Update II: Arjun's father, Karl, responds: "Arjun does not work full-time on PlaySpan business. As a gamer he has a great deal of input in PlaySpan's product and technology, but his primary focus is on his academics and his mom doesn't want much media attention for him.... I am the Co-Founder and CEO and I run the company"]
New York based Easton Capital led the funding round, along with Silicon Valley based Menlo Ventures, South Korea based STIC International and Hong Kong based Novel TMT Ventures.
The release said the market for “in-game commerce” has surpassed $2 billion this year and continues its rapid growth as more publishers adopt micro-transaction based revenue models.
Shawn Carolan, of Menlo Ventures, has some experience with gaming, as a board member of virtual world game, IMVU. The young Mehta even knows how to pick his VCs.
Tags: co:PlaySpan, deal, Easton-Capital, inv:Menlo-Ventures, people:Arjun-Mehta10 Comments
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Rafat said:
Matt
The story about 12 year old co-founder is a big oversell…I know because I broke the story on funding two days ago. The CEO Karl Mehta and Arjun’s dad is the real guy behind it…arjun just came up with part of the idea for it, and is not really involved with the business per se. Arjun’s mention on the site is a gimmick which will be rectified soon…the release doesn’t mention him and for good reason. -
Matt Marshall said:
Thanks Rafat. I sent a bunch of questions to the company about an hour ago to the PR person, because she said Arjun preferred email correspondence. I’ll update if/when I hear back.
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rquist said:
Given the low quality of VCs that have invested I would say that this is a waste of 6.5mm and the company will be gone within 2 years.
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Truth said:
I GUESS IF THIS WAS A WHITE SKINNED 12 YEAR-OLD, EVERY BODY WOULD HAVE PRAISED HIM HUH?
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thestryder said:
It’s funny how someone always has to bring up race as a reason for criticism. I don’t see any reference to race in any of the posts prior to TRUTH’s. Regardless of color/race if the product is viable it can stand on it’s own merits. Many of the online games consider the selling or buying of in game items in RL(real life) as a TOS violation so it will be interesting to see how WoW and other MMORPG’s respond to this.
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Chris said:
Dude - This is the most lame excuse for a ‘pr strategy’ to say that your kid is the CEO because it’s a gaming oriented company. The cred of this company has just hit rock bottom (and they are just launching - what are they thinking). Who are the people investing in this company? Tighten up the noose on this loose cannon.
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Matt Marshall said:
I’ve updated with a comment from Karl, Arjun’s father.
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CK said:
It’s easy to tell if this is a gimmick. Does Arjun own shares in the company, and does he have a trustee to monitor his financial decisions (like a child actor)? If not it’s a particularly noxious gimmick by Dear Old Dad. There’s a line between Rascally and Retarded, and Karl appears to have crossed that line about a mile back.
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Valley Waggers said:
Rumor has it that the key to their success in raising VC has been having the “right look”.
http://smartstartup.typepad.com/my_weblog/2007/09/secrets-of-rais.html -
Greg said:
I read all of your comments which all were a year ago. So has this company proven itself or not? Forget about the father and son BS, do they have a viable technology or not? They have management from very well known and respected companies (Lucas Industrial Light and Magic etc.). These people are in high paying key management roles and would not have left their positions at companies with known staying power if they thought this was a wet dream.
I would really like to hear from someone who has no axe to grind if he or she thinks thinks this company has a future?
If this is possible, given all the negative (sour grapes?) comments I have seen so far I would really appreaciate an objective opinion from someone who cares about what is going on.
Look forward to your thoughts.
8 Trackbacks
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[...] buzz because its cofounder, 12-year-old Arjun Mehta, hauled in $6.5 million in venture capital (although it’s suspected that his father and CEO Karl Mehta is using Arjun as a mere promotiona…). Talk about a startup in need of adult supervision. Arjun makes teenage entrepreneurs [...]
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September 20, 2007 at said:
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