QuirkChat is raising a SAFE at a $4.5 million valuation cap (with a conversion discount and lower valuation available for early bird investors). This price is competitive among similar early-stage companies, particularly given QuirkChat’s previous investment from leading firms and funds like Snapchat and SoGal Ventures. Therefore, QuirkChat’s price rating is its highest.

There are few professional estimates of how many anime fans and gamers exist in the world. QuirkChat counts 76 million people in the US and 2 billion people worldwide as members of the anime and gaming community —  but it does not cite a source for those statistics. 

This Statista article reports that 33% of the Japanese are fans of anime. Japan’s population is roughly 127 million, so that’s roughly 42 million Japanese anime fans. Assuming that the proportion of anime fans in Japan is the highest among countries worldwide, the U.S.’s proportion of anime fans is probably closer to 15%, or roughly 35 million (bringing us to 77 million anime fans between the U.S. and Japan). 

That number doesn’t seem to track to 2 billion anime fans worldwide, though it only counts anime fans. Adding in the gaming community would include about 70 million “heavy gamers” in the U.S. alone. In sum, it’s difficult to precisely benchmark the size of the anime and gaming market. The total amount of eligible geeks in the world is likely under a billion, with numbers likley closer to 150 million in the U.S. Combined with the fact that QuirkChat only monetizes off of a small percentage of this potential user population willing to tip creators, QuirkChat’s potential market is very small. Hence, the company’s market rating is its lowest.

QuirkChat was founded by Bee Law, formerly a cytogenetic scientist who started QuirkChat because she felt unconnected from a community of geeks and gamers. Law holds a bachelor of science from the University of North Carolina at Charlotte. 

The QuirkChat team also includes Lauren Grant, Chief Content Officer. Grant has over five years of experience as a video content creator and producer. She holds a bachelor of science degree in Mass Communications from Virginia Commonwealth University. The remainder of the QuirkChat team is comprised of a Tech Advisor, Head of UX, and Executive Editor. 

While the QuirkChat team is clearly passionate about the fandom community and well-suited to curate content and connections targeted at that group, the team lacks formal business or entrepreneurship experience. Therefore, QuirkChat’s team rating is moderately low.

QuirkChat is highly differentiated from traditional social networking platforms in that it serves a niche audience of geeks, gamers, and general fandom enthusiasts. This differentiator is its key selling point: geeks should download QuirkChat so they can meet other members just like them, a promise that can’t be upheld by the likes of Facebook and Twitter. 

However, there are social networking platforms that are a bit more specific to the fandom and gamer groups than Facebook and Twitter. Reddit has attracted groups of niche hobbyists, including anime fans, for years. Twitch and Discord are hubs for gamers and have gained mass-market appeal through celebrity appearances (like AOC’s recent stream to connect with young voters). QuickChat is apparently focused on curating a more inclusive and healthy community than those that exist on larger platforms, but the company offers few concrete details about why these procedures are different than that of Discord or Twitch. 

Overall, QuirkChat is both highly differentiated and hardly differentiated. While geeks and gamers may feel alone on mass-market social networking platforms, it’s not too difficult for them to find community on Reddit or Twitch. Therefore, QuirkChat’s differentiation rating is middle-of-the-road.

In 2019, QuirkChat generated $118,250 in revenue with a net loss of just $21,416. The company reports having generated over $200,000 in lifetime revenue. While QuirkChat alludes to the fact that revenue projections for 2020 were slashed due to the negative impact of COVID on the events industry, it does not offer an indication of current 2020 forecasts. 

For a niche social networking platform with limited market size, $200,000 in revenue and 25,000 monthly active users are solid figures. Therefore, QuirkChat’s performance rating is moderate.

QuirkChat appears to be a company that is still finding its post-pandemic footing. Geeks and geek creators alike seem to have been benefiting from the QuirkChat platform before COVID hit — largely via events and meetups. Now, the app has pivoted significantly to focus more on tech features that allow users to connect and share content virtually. It is too early to tell whether these features will be a success. 

While QuirkChat has undoubtedly developed a passionate community, the biggest question is whether the company can adequately monetize under this revised business model. Monetization via micro-transactions (creator tipping) is somewhat unproven among similar companies. Twitch allows users to tip content creators (streamers), but advertisements are likely a much larger portion of its revenue. Leveraging a relatively small user base to generate revenue via tiny transactions may not fund long-term growth for QuirkChat, and therefore may not guarantee returns for investors. 

QuirkChat has cultivated a community of over 25,000 monthly average users and was able to pivot quickly to introduce tech-forward features to this community after COVID hit. This current capital raise is largely devoted to user acquisition and marketing, so the QuirkChat community could grow quickly in coming months and years. A refined microtransaction strategy plus the re-introduction of event ticket revenue (and perhaps advertising revenue) could allow QuirkChat to monetize these new users. 

In the long term, QuirkChat could succeed by expanding into international markets that are even more enthusiastic about anime and video games, including Japan. This may be the strategy that allows QuirkChat to expand its market beyond the niche of U.S. geeks and become a global fandom brand. 

QuirkChat is a community for geeks, gamers, and every fandom enthusiast in between. Through events (currently virtual, eventually in-person) and tech features designed to allow geeks to connect with old and new friends, QuirkChat is aiming to create an inclusive and positive space to explore hobbies and interests. 

QuirkChat’s focus on anime fans, hardcore gamers, and comic con attendees makes the app quite niche. This small market combined with a fledgling monetization strategy are not strong signals of future growth. On the other hand, QuirkChat’s performance to date has been solid, and investors can back the company at a reasonable price. Therefore, QuirkChat has been rated a Neutral Deal.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to [email protected]. 

Analysis written by Katy Dolan.