Central American game developer LionWorks has closed an investment round led by PeopleFund, the startup announced today. A few weeks ago, the Miami-based fund had backed another gaming venture, PlaySpace (see our story).
As PeopleFund strengthens its investment portfolio, we decided to ask a few questions to its president, serial entrepreneur Jose Vargas.
TNW: Can you tell us about PeopleFund’s background?
Jose Vargas (JV): Matias [de Tezanos], Julio [Arrivillaga] and I are Internet entrepreneurs from Latin America. They both are from Guatemala and I am from Venezuela, but have been living in Miami for 15 years.
Together, we have built and sold a number of Internet companies. One of the first ones was hoteles.com – ‘hoteles’ is the Spanish word for ‘hotels’. In 2002, it was acquired by IAC, the parent company of Expedia.
Then in 2001, we built an online lead generation and e-mail marketing company here in Miami, MailCreations.com, which we grew very fast and sold in 2004 to Livedoor, then a $10 billion, fully-traded Japanese Internet company.
We also built the largest online advertising network in Latin America at the time, ClickDiario, which was acquired by Fox in 2006. It has basically become .FOX, which has its big headquarters in Guatemala because of that acquisition.
After that sale, we started a new company in 2008 now called Brokersweb [and formerly as Healthcare.com], a pay-per-click advertising platform for insurance and financial services, which was listed twice in a row by Inc Magazine as the fastest-growing company in the insurance category. It did about $56 million in revenue last year, and we sold that company to Vantage Media.
At that point, we decided we wanted to invest in other Internet entrepreneurs, applying what we knew on how to operate into other ventures, and we started PeopleFund.
TNW: Is PeopleFund a VC firm?
JV: PeopleFund is not actually a VC firm, because we didn’t go out and raise money from outside investors – it’s all our funds.
We invest in other Internet companies, for instance PlaySpace in Spain, another site in Asia, Ecomom and Getaround in the US… We have also acquired some healthcare domains, like Healthcare.com, which we control.
So it’s a mix of private equity fund and something close to an early-stage fund, but we like to concentrate on companies that we can help scale. They already have revenues, a business model, a team and technology – they just need money to scale.
TNW: How many investments have you made since launch?
JV: We have closed about 22 investments so far, between last year and this year. PeopleFund started in stealth mode a couple years ago, and that was just us doing investments independently, but this year we started to organize ourselves as a structure. We are 5 partners and we have analysts, auditors, and a technology team.
Most of our technology is done in Guatemala, where we have about 100 employees. We have been working with the same people for 13 years, they have a very good tech background and it’s only two hours away from Miami. We have sold several companies there, it is very cheap as a production hub and it works very well for us as a production hub. [See our post about Central America and startups]
TNW: Are you location-agnostic for your investments?
JV: Yes, we have already invested in the US, Latin America, Europe and Asia.
TNW: Are you investing in Guatemala?
JV: Definitely. One of our companies in Guatemala is an outsourcing company that does online projects for Orange. We also invested in Quetsol, which operates in Guatemala and is trying to provide electricity generators for poor people who don’t have access to any electricity grid. These generators use solar energy to power lightbulbs, which kids can use to study at night. It’s changing the life of people in Guatemala who would otherwise be using candles.
Most of the companies that we build either are based in Guatemala or have their technology teams there, even if they have headquarters in Miami.
TNW: How do you get your deal flow?
JV: We source from people we already know, such as entrepreneurs we’ve already worked with throughout the years, are building something new and need help to expand. We also get indications and recommendations from friends, so we are not really out there looking for pitches.
TNW: What’s your average ticket?
JV: It usually ranges from half a million to a million, but we have done larger investments as well.
TNW: Can you tell us more about Lionworks, in which you have just invested?
JV: Lionworks is an interactive and console games developer based in Guatemala. They actually have a team of 40 people there. The founders are also from Guatemala, and they started Lionworks three years ago to produce games locally. They already have a few titles, and have participated in Sony’s incubator for Latin America.
TNW: Would you invest in any kind of Internet startup?
JV: No, we need to understand what they are doing, to be able to make a difference and help – so companies that have products that can be scaled through media buying technology and provide value to the user are the kind of investments we look for.
While accelerators and seed funding opportunities have started to mushroom in Latin America, it is interesting to see a fund that is focusing on a different gap and providing ventures all around the world with the capital they need to scale.
Image credit: Joe Raedle / Getty Images