This Argentine Startup Applies Gaming to Corporate Training and Marketing

Buenos Aires — At the age of 23, Argentine Tomás Giovanetti is the founder and CEO of TGA, a startup that uses video games to provides corporate training and marketing, and which he founded when he was 16, and which today has among its clients brands such as Nestlé in Chile, Femsa in Mexico and Deloitte as a regional partner.

But the journey that led him to launch a startup that is now seeking to close its first round of investment at such a young age has little to do with the business world.

Between the ages of 10 and 16, Giovanetti put all his efforts into the goal of becoming a professional tennis player.

“I started training and competing more and more on the Argentine and international circuit, and while I reached the 30th position in the Argentine Tennis Association’s U-18 ranking, at 16 I got tired, quit tennis and entered the entrepreneurial world,” he tells Bloomberg Línea in an interview, describing the world of tennis as “lonely and full of sacrifices”.

With a racquet bag on one shoulder and a laptop bag on the other, during his last year as a tennis player he became interested in developing video games, which he played while traveling to tournaments, while seeing the possibility of making a living in that sphere.

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And thus he began to get involved in developer communities on the Internet, where he met Jordi, a Spanish Youtuber who taught him how to make video games, and who eventually helped him create You Deserve, a game focused on the issue of bullying.

They ended up selling more than 22,000 copies at $9.99 each, and then received hundreds of CVs from people interested in working with them.

“My parents didn’t understand anything. Imagine, I was playing tennis and working at four in the morning, because Jordi was in Barcelona and would spend half an hour with me at eight in the morning, and I had to be there,” Giovanetti says.

He then gave up competitive tennis and decided to focus fully on the world of gaming, while the success of You Deserve aroused the interest of local journalists, and as a result of giving in-person interviews, he missed his high school graduation trip.

“That’s when I realized it was what I wanted to do. I want the game to be a bridge of communication and for people to learn in a different way, to learn by playing,” he says.

And that potential was ratified: In 2020, he was recognized by MIT Technology Review, the magazine of the Massachusetts Institute of Technology, as one of the most innovative under-35s in Latin America.

During the course of this year, Giovanetti plans to close contracts with clients in Europe and Latin America worth more than $1 million. Today, TGA has close to 100 employees and among them are the former president of Volkswagen in Argentina, Hernán Vazquez (Chief Strategy Officer), and a former CEO of Aerolíneas Argentinas, Mario Dell’Acqua (board advisor).

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TGA’s big goal for 2022 is to close its first round of investment to become the “Wordpress of gaming”.

“For two years we have been working on a low-code platform that will allow us to become an easy and fast way to adapt to different needs,” Giovanetti says, while maintaining that the company aims to “deepen our expansion in Latin America and continue with a very aggressive growth that may even include some acquisitions”.

The following conversation has been edited for length and clarity.

How did you go from developing a game on a social theme to leading a company that develops training and marketing games for companies, dedicated to corporate gaming?

I have different mentors. One of them was a key person in my life, and his name is Gabriel Monti, a former Techint. He is a friend of my family and he told me, ‘I love what you are doing, have you ever thought of doing it for the corporate world, for example for compliance?’ I started talking about the idea and it seemed very attractive. Between 2016 and 2020 I worked with six or seven clients, the Argentine Polo Association, 47 St., Osdepym, and some more clients, using gaming as a communication bridge. With Osdepym I made a game about how to lead a healthy life. With the Polo Association I made the world’s first polo video game. In 2020, I was with my girlfriend in Punta del Este and I told her I wanted to start a serious company.

And what happened in 2020?

They called me from Nestlé Chile through a mutual friend, which is why I am so fond of Nestlé, because it was my first international client. They were launching a brand of ice cream called Helados Zoorpresa, from Nestlé Savory, which are shaped like animal,s and they could not communicate it to children, because of marketing policies to children, due to obesity issues, and the labeling laws and all that. And also because children do not watch television, do not listen to the radio, do not read magazines, and are alien to traditional communication. And we developed a video game about the animal world. Today that game is still running in Chile, and has 200,000 users among a population of two million children. You download it with the QR code and the characters that explain the animal world and so on are the same ones that star in the ice cream campaign. Well, the game was a success in Chile, we did very well, and after that I started to develop what TGA is today, and I realized that I could no longer afford to put together contracts and numbers, and that I needed to put together a serious team.

Who were the first hires?

I met Mario Dell’Acqua [former CEO of Aerolíneas Argentinas], who joined the board of directors, and he helped me put together the team and created a very strong management team. I brought my CFO, who was the former CFO of Arcos Dorados, Julio Alfonsín; my commercial director who managed the food business for Unilever for Latin America, Jorge Arilla, and a very strong IT team. A very strong team. The former president of Volkswagen [Hernán Vázquez], the former CEO of Deloitte for Spanish-speaking Latin America [Miguel Maxwell]. They are the guys, I am the CEO and I am a majority shareholder of the company. There are people aged from 30 to 40 and there are people aged from 50 to 60, of many backgrounds and so on, with the idea of formalizing this company.

Today you focus more on training and compliance than on marketing. What led you to this transition?

We started out and two months later the pandemic hit. We were 10 people, and I could not pay them salaries, so I paid them with equity. In addition to a symbolic salary. We defined a business strategy where we financed ourselves with the same cash flow from our operations, with the clients that came in, and we decided to grow slower than the rest of the companies in the world that were raising capital. We grew more slowly, but at a steady pace. The first thing we said was that the first thing companies would cut was marketing budgets. We outlined two lines of business, one called branding games, which are advertising video games, and a second line of business called training games, which are basically video games for training purposes. Compliance, sales, cybersecurity, industrial safety. We saw that there are certain training programs that companies have to do. But you could no longer do them in person, because of the pandemic. So, that is where we came in and we started to deepen a lot the development of this line. Today, 70% of revenues come from the training games line, and 30% from the branding line. We have clients such as Helm, a Dell company; Cruz Verde, Telefónica, Bayer, Novartis, Nestlé, Bimbo and FEMSA Mexico. Also Deloitte Spanish Latin America, which covers 16 countries, we are developing a series of products linked to cybersecurity training.

In which countries are you operating now?

We are working in Argentina, Chile, Peru, Mexico and Spain. In the meantime, in Spain I struck up a partnership with Lorenzo Sanz, who is the son of the former president of Real Madrid FC, and we opened operations there. Today I have an office in Miami, and we are interested in starting to generate commercial operations there, although we do not yet have any. I really want to enter the United States. The focus of my business is to end up entering Brazil, Asia and the United States.

And now with the end of the pandemic, is that focus on training changing?

Yes, because companies are investing in marketing again. For me, the pandemic has not ended, but the pandemic context is something that will continue, and there may be a very strong recession in the world. What is happening in the United States, with the rates and so on, is something that for me is just beginning. There are going to be tough years ahead. Now, in terms of the company, I believe that I have the two lines that at some point will end up matching each other. The company has grown a lot, we are almost 90 or 100 collaborators now. We are a lot within TGA. We hire people mainly from the interior of the country, from Córdoba, Mendoza, Chubut, but we also have developers in Colombia and Peru, for example. Everything is 100% remote, without offices. There is an office in Miami, but everything else is remote. We are betting a lot on growth through alliances. And we are preparing for an investment round. My idea is to go to a venture capital firm by the end of this year and raise a very good investment round.

Why are video games effective when it comes to teaching?

People compete in the game, have a good time, and don’t realize they are being evaluated. In other words, it is a question of engagement. You have to do the course. It is not a matter of discussion whether or not you do it. But you have the chance to read a PowerPoint and complete a true or false quiz, or enter a game with super fun storytelling, while competing with your friends, winning points, prizes or rewards, such as a day off, for example.

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Is your goal of achieving global scale achievable?

Yes, but I would not underestimate Latin America. For me, Latin America as such is a big market. Mexico alone is a huge country. Argentina is too, with its difficulties that we all know about. Chile is also a big market, although obviously it has less population. They are very significant markets for startups. And they are also good sandboxes to try things. My focus is to reach a global level, yes, without a doubt. And 10 years from now you’ll see what the gaming statistics are. The gaming industry is growing at a rate of 30%. It is crazy to grow 30% per year, and my company is growing between 100 and 200% per year. The gaming industry today in the United States represents a higher rate of revenue generation in that country than sports and movies combined. I think that’s my answer.

Do you think you are going to achieve the fundraising round you are aiming for?

Yes, I think so. As the Americans say: It’s about timing. It’s a matter of luck. I have friends who raised millions of dollars with a PowerPoint. It’s a matter of timing. Now, the Americans say you have to live under the promises, that is, you have to live with the promises you yourself made. You said that your company is worth X million dollars, well, you have to justify that it is worth that. We are coming from a period of unprecedented investments in Latin America in startups. We are seeing valuations that have never existed in history.

Did growing without raising capital make you more disciplined?

I am the one who faces the shareholders, you see? I am the one who faces them afterwards. If today my company is worth 100, they enter at a valuation of 100, and then if I do not deliver the 100, I am the one who has to face them, and I am not willing to lie to anyone. Today my company works on its own, I am the majority shareholder and I am willing to close a round with people who want to join me and set a valuation that we all feel comfortable with in order to scale the business and become the most admired corporate gaming company in the world.