Exit: Jodel buys southern German avatar startup Layzr

Gamers have so far used their avatar technology primarily in Twitch streams. The anonymous network Jodel wants to further monetize its platform by acquiring Layzr.

At the Christmas party of the Berlin investor Atlantic Labs, Peter Krysta and Tom Segbers joked about whether the social network Jodel would buy their avatar startup Layzr. Because the founders actually had a completely different offer on the table at the end of 2023: A large US forum, whose name the founders cannot reveal due to a confidentiality agreement, had expressed interest in their technology and wanted to roll out their product on the international market. “We are currently talking to our American colleagues, would that also be an option for you?” the Layzr founders are said to have casually asked Jodel CEO Alessio Avellan Borgmeyer over punch.

A good six months later, the takeover is certain. After the deal with the US competitor was “completed relatively quickly” according to Krysta because the competitor was in the middle of preparing for its IPO, Jodel took the bait. “Then the fun turned serious,” says the Layzr CEO today. Their technology, which allows users to create their own digital image, will thus be fully integrated into the Jodel app. This gives the anonymous network an opportunity to further monetize its own offering. Jodel already earns money through advertisements, subscriptions and in-app purchases, with the ten-year-old platform reaching users in Germany, but above all in the Nordic countries, the Middle East and North Africa. “Alessio saw that we were a good fit for Jodel in terms of product technology and that they could implement their roadmap more quickly with us. We were a shortcut for them, so to speak,” says Krysta. Neither side is revealing the exact exit sum.

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Previously, users could embed avatars in Twitch streams

The startup Layzr was previously known primarily in the gaming scene, on the streaming platform Twitch. The startup's platform allowed users to create their own digital persona, buy accessories and put branded shirts and caps on it, for example, to identify with their streaming community. With their finished avatars, users could then walk around in live streams on Twitch, interact directly with other gamers and streamers and take part in events such as games. “At a football game, for example, you buy a jersey to show your support for the team – but in the streaming world, where everything is digital, that's not possible. You need a digital avatar there,” explains founder Segbers.

According to its own information, the startup, which Krysta and Segbers founded together with Tom Lamsfuß in 2021 in Ehingen, Baden-Württemberg, had around 100,000 users and around 1,000 partnerships with streamers by the time of its exit. “Everything developed positively, we had launched a cool product that worked well in the gaming target group,” says the CEO. “Nevertheless, the idea was always to break out of the gaming market and make what we had achieved in the niche really big.” For the founders, the next logical step was to expand to other platforms such as YouTube or to get deeper into the content creator business. At the end of 2023, the takeover plans became more concrete.

Joint investor Atlantic Labs brought Layzr and Jodel into contact

The investors are now also benefiting from the deal, especially one: Atlantic Labs. The European fund is involved in both Jodel and Layzr. The avatar startup closed its last financing round of a mid-six-figure sum in early 2022 with Atlantic Labs as lead investor and the incubator Evolve, which specializes in e-sports. Long before the exit, the Layzr founders met Alessio Avellan Borgmeyer from Jodel. They were supposed to exchange ideas with him in the run-up to the Atlantic investment.

The Layzr brand will now probably disappear. The founders assume that Jodel will first test in different markets which features are well received and then develop a freemium and premium model for the avatar function based on this. CTO Segbers can imagine that Jodel users will be able to share their avatars on other platforms such as Whatsapp, for example, or use them to create their own memes. “There are many different ways the integration could ultimately look.” He compares the takeover to Snapchat's purchase of Bitmoji in 2016 – “only in German and better.”

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Co-founder Krysta explains that by incorporating avatars on the previously purely anonymous platform, where users can post short text contributions, photos and videos, a form of “intermediate anonymity” is now achieved. “On the one hand, you don't have a real name. What you post cannot be associated with you. On the other hand, you can use an avatar to create your digital personality and recreate your character.”

The purchase of Jodel also marks the end of the Twitch collaboration. Gamers will no longer be able to include their avatars in live streams. According to the founders, the response within the community has been overwhelmingly positive. “We already announced this and discussed it with the community early on. They were not happy, but there is understanding and many are happy too,” says Krysta.

Layzr founders are already planning new startups

Some Layzr employees probably want to stay loyal to the gaming scene. According to the CEO, they all received an offer to start at Jodel after the transition phase and to join the team, which now has 60 members. However, many have already indicated that they want to continue working in the gaming industry – this is probably the best way for them to combine their free time and their job.

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As far as the founders themselves are concerned, they also have other plans. “Once you've had a taste of entrepreneurship, it's difficult to get away from it,” says Krysta. “I originally come from management consulting, and there you do exciting things too. But this feeling of ups and downs, you're doing product launches, financing, fears for your existence – somehow being a founder makes you a little bit dependent.” He is therefore certain that he will start a business again in the medium or long term.

Co-founder Segbers feels the same way. He is already well advanced with his ambitious startup plans. “I am currently building a small team,” reveals the founder. “We want to bring the German answer to humanoid robotics.” After several years in the gaming industry, he is again interested in advancing the topic of artificial intelligence. “For me, this is more of a homecoming,” says Segbers. “I programmed the first robot twelve years ago, back then it was still made of Lego bricks.” Now the computer scientist, who worked as a student at the Munich dual-use startup Hattec, is aiming for something bigger: the prototype of his robot equipped with arms and sensors is to be ready by the end of 2024. In theory, it will be used at airports in the future and help with luggage. “Next year we want to bring a first robot to the European market.”

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