Dear Fellow IMVU Members:
Hi! I’m Cary Rosenzweig (“CaryJay”), Chief Executive Officer of IMVU.
Today we announced in a press release that IMVU company revenue has doubled in the past year and that IMVU is now profitable. The release also says that we are at a “$25 million run rate.” This means that if you multiplied our current monthly revenue times 12 (for 12 months in one year), then you would get $25 million.
IMVU was founded in 2004, over five years ago. Since the beginning, the company has been supported by investors who gave IMVU money to build and grow the business. Of course, IMVU also gets money from customers and advertisers (this is called revenue), but until recently it always cost more to run and grow IMVU than we took in as revenue. Simply put, until recently our expenses were bigger than our revenues, and we lost money every month. This loss was funded by our investors. Naturally, one cannot sustain a company forever if it is always losing money.
We are now profitable due to an increase in revenue at the same time we have been holding our expenses steady. Profit, of course, means that we now take in more revenues than our expenses. Our revenue increased because more IMVU members are buying credits, earning credits and buying virtual goods.
What does IMVU profitability mean to you? First, IMVU profitability means that we will survive and thrive for many years to come; therefore, you can invest your time, talents and energy in IMVU and know that it will always be there for you. Second, we are going to invest most of our profits back into the company by hiring more employees (“staff”) in order to improve your experience on IMVU. Many of you have told us how excited and supportive you are of the changes we’ve been making on IMVU, but we all know there is much more we can do to improve the member and creator experience. More staff will help us improve your experience.
The full text of the press release is included below. I’m dedicating today’s announcement to you, the members and content creators of the IMVU community.
The staff at IMVU has been working very hard to give you the best experience possible. As a result, IMVU has more members, more products, more customers, and more creators than ever before.
I invite you to share any feedback you have related to this announcement or IMVU in general – be it kudos, suggestions, or concerns – with me by emailing CEOfeedback@imvu.com. While I’d love to respond to every email I receive, I simply cannot. Instead, I’ll summarize the input and share the common themes with all of you within the next week or two.
Wishing you a great IMVU experience,
Cary Rosenzweig (“CaryJay”)
Chief Executive Officer, IMVU
October 5, 2009
Below is the full text of today’s press release.
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IMVU Doubles Revenue in One Year to Achieve $25 Million Run Rate
Virtual world reaches profitability with success of user-generated virtual goods business
Palo Alto, CA – October 5, 2009 – IMVU Inc., an avatar-based social network and virtual world where people meet and interact in 3D, today announced the company has doubled its revenue in one year to a $25 million run rate and achieved profitability. IMVU grew its revenue primarily by increasing the sale of virtual currency to its members, who use that currency to purchase virtual goods ranging from clothing for their avatars to furniture for their rooms. IMVU’s catalog of virtual goods is the largest in the world, with more than 3 million items created by IMVU members.
“We’re proud to have grown revenue so quickly at a time when consumers have been cutting their personal spending,” said Cary Rosenzweig, CEO of IMVU. “We attribute our success to five years of hard work by our employees and to the creativity of our members. We’re investing most of our profits to hire more employees so that we can further improve the customer experience.”
Since launching in 2004, IMVU has grown into one of the largest virtual worlds, with more than 40 million registered users and 6 million unique visitors per month. The service offers a simple yet immersive 3D environment where users can customize their avatars and rooms, and meet and interact with other people from around the world.
“IMVU has succeeded because our business model gives users what they want—fresh and relevant content created by our community, for our community,” said Lee Clancy, Vice President of Product Management and General Manager of Direct Revenue at IMVU. “More than 35,000 3D developers have sold virtual goods in IMVU’s catalog in the last 30 days. These user-developers add more than 4,000 new items to the catalog every day, which enables the millions of users who visit our site each month to enjoy a highly personalized experience.”
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