Category: Tilia

Linden Lab to sell payments platform Tilia to Thunes

Posted on by Inara Pey
via Tilia.io

It has been announced that Tilia.io, the all-in-one payments platform established by Linden Lab in 2019 and which manages payment processing and cashing out for Second Life (as well as supporting a number of other platforms and virtual environments), is to be acquired by Singapore-based business-2-business (B2B) payments infrastructure firm Thunes.

The acquisition of Tilia will be for an undisclosed sum, and follows an agreement being reached between Thunes and Tilia majority owner Linden Research (the formal name of Linden Lab). However, it is still currently awaiting regulatory approval, so has not  – as of the time of writing – being finalised.

News of the acquisition was made public via a press release widely circulated by Thunes on Tuesday, April 23rd, 2024 (see links below for some of the reporting on the announcement), and has sparked comments, discussions and questions on a number of Second Life related forums.

Who Are Thunes?

Thunes is regarded as a start-up company, although it has been operating for some eight years. As a B2B payments company, Thunes powers payments for major brands such as Uber and Deliveroo, and also to global Fintech companies such as PayPal and Remitly.

They boast that with a single connection, businesses and their customers can both send payments to, and receive payments from 133 countries around the world, with support for 84 currencies and some 550 alternative payment methods (ATMs), including 129 recognised mobile wallets. Whilst headquartered in Singapore, the company has regional offices in London where communications on the deal with Linden Lab are being handled), Paris, Shanghai, New York, Dubai, and Nairobi. In addition to providing a B2B payments infrastructure direct to businesses across the world, Thunes also provides payment services to the banking industry, a service it is aggressively growing in order to more fully compete with SWIFT, the world’s dominant international financial network.

In December 2023 Thunes achieved a market valuation of some $900 million, with its series C funding round bringing the company some US $202 million investment – including from the likes of Visa, the global payment giant, Singaporean government investment vehicle EDBI, and US-based Endeavor Catalyst.

Why Would They be Interested In Tilia†?

Tilia is particularly attractive to Thunes as it is already a fully licensed Money Service Business (MSB) across 48 US states and territories, thus allowing Thunes to readily extend its services to business owners and customers across the United States – including Tilia’s current customer base, which obviously includes Second Life, as well as VRChat, Upland, Avatus and Unity. In addition, through brand recognition within the content creation market and its expertise in managing token-based virtual economies such as the Linden Dollar, Tilia provides Thunes with a ready-made means of expanding its presence in these markets both in the United States and globally.

What Does This Mean for Second Life‡?

This is perhaps harder to quantify from the side-lines. However, there are some points which may be worthy of note:

  • Following regulatory approval, Tilia will be re-branded Thunes, but will continue to be based in San Francisco.
  • The agreement is subject to an exclusive 5-year collaboration, Thunes will provide payment processing and payouts to Linden Lab across Thunes’ global network.
    • This should allow Second Life users and creators to enjoy more options for buying Linden Dollars and for cashing-out “in a more cost-efficient manner and with increased transparency”, with the Lab adding via a comment on a Reddit thread, “without additional costs”.
  • In support of the above, the Thunes press release includes the following statement from Brad Oberwager, Linden Lab’s co-owner and Executive Chairman:
Thunes is an exceptional company that directly connects nearly every payment method and market worldwide. The combination of Tilia and Thunes will give Linden Lab’s customers more payment choices, and the ability to receive pay-outs in real-time, anywhere, into the wallet or bank account of their choice. It will be business as usual for our people and our customers as we bring Tilia and Thunes together.

I reached out to Linden Lab on hearing the news, and was informed that although the company has nothing further to add to the Thunes press release at this time, those from the company who will be attending the forthcoming Community Round Table (informally announced during the April 19th Lab Gab session, and featured in my summary of that event) will be prepared to discuss the acquisition. I’ll have a post on the Round Table as soon as all information relating to it (where, time, how to attend / watch) is publicly released.

With thanks to Coffee Pancake for the alert.

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† Please note I am not an financial services expert, this section is therefore a subjective best guess.
‡ Again, please note this is a subjective best guess, even given the supporting quotes.

Note: updated to better reflect Tilia’s relationship with Second Life.

VRChat uses Tilia LLC to Power Its Creator Economy

Posted on by Inara Pey
via Tilia LLC.

Tilia LLC the digital payments platform created by Linden Lab, the makers of Second Life, is to power VRChat’s new Creator Economy, the first phase of which was launched on Tuesday, December 5th, 2023. In doing so, VRChat becomes the latest in a growing list of platforms and games utilising Tilia’s capabilities, including Second Life, Unity and Avatus.

The announcement came via a press release issued by VRChat and published by numerous outlets including Business Wire, which revealed the first phase of VRChat’s new Creator Economy is called Paid Subscriptions. It allows VRChat users to subscribe directly to their favourite creators and support them financially. In return those creators are able to craft unique, custom experiences for their supporters to enjoy. Eventually, the new Creator Economy is intended to allow the half-a-million creators using the platform to receive compensation for their work.

In particular, the Paid Subscriptions system is closely linked to the VRChat’s Udon custom scripting language, allowing creators to more easily build custom experiences for those supporting them through the service. IT has also been developed to work with many of VRChat’s other systems with the aim of enabling pre-existing communities on the platform to monetize their offerings as the Creator Economy is built-out and enhanced.

We’re thrilled to finally launch the first piece of the VRChat Creator Economy, Paid Subscriptions! Our community is responsible for everything magical in VRChat, and the Creator Economy enables us all to financially support our incredible creators. Our hope is that with more support, our creators can bring even more magical content to the platform.

– Graham Gaylor, Co-founder and CEO of VRChat

As an all-in-one platform and service, fully registered across the United Stats as a  licensed money transmitter, together with decades of expertise in dealing with digital currencies and token systems which can be transferred to and from fiat currency, Tilia occupies a unique business space. It is both able to provide platforms like VRChat with unique insight into operating and managing digital economies, and it can supply the core systems and services necessary to do so, whilst meeting all the various compliance and regulatory requirements for digital transactions and money transfers, relieving customers of the need to do so themselves.

Since it inception, Tilia LLC has been gradually building its client base and working to establish strategic partnerships, such as with J.P. Morgan Payments as announced in October 2022, and which saw an expansion of Tilia’s board (read more here). However, within the sector of immersive 3D social  / creative environments, VRChat is a name that is probably as instantly as recognisable as Second Life, and represents a major new partnership for Tilia LLC going forward.

Tilia was built to support the unique and complex requirements for creator-based economies. We are proud to partner with such a recognised innovator like VRChat as they seek to further encourage, empower and enable their creators.

– Brad Oberwager, Tilia LLC CEO

Read more via the press release.

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Tilia LLC gains strategic investment from J.P. Morgan

Posted on by Inara Pey

Tilia LLC, founded by Linden Research Inc., as a wholly-owned subsidiary specialising in virtual currencies and providing money services business solution to virtual platforms, has announced it has gained strategic investment from J.P. Morgan Payments, a part of the world’s largest bank (by market capitalisation), JPMorgan Chase.

Tilia has been running Second Life’s US $650 million dollar economy for the past seven years, handling over US $86 million is payments to users in the last 12 months alone. Tilia’s services have also been used by the likes of Sansar, Upland and Avatus, and leverages in partnerships with Unity (allowing Tilia’s API and services to be made available to Unity developers as an integrated end-to-end payment solution) and Applovin.

E. Drew Soinski, Senior Payments Executive, Managing Director at J.P. Morgan Payments joins the Board of Tilia LLC

While an (unspecified in dollar terms) minority investment, J.P. Morgan Payment’s involvement is liable to allow Tilia to increase pay-out methods and the number of currencies it can support, thus allowing it to provide a pay-out in local fiat currency for creators to pretty much anywhere credit cards work.

The deal has been in motion for almost a year, with effort being put into ensuring Tilia’s services are interoperable with those of J.P. Morgan Payments as well as structuring the overall financial elements of the deal. With its completion, E. Drew Soinski, Senior Payments Executive, Managing Director at J.P. Morgan Payments, has  joined Tilia’s board of directors, serving alongside Brad Oberwager, Raj Date and Aston Waldman, who is also the company’s CEO.

From Tilia’s perspective, the partnership means the company will be even better placed to serve the emerging stream of “metaverse”-related companies, providing a wide range of currency services.

Tilia is money into the metaverse. It’s money moved into the metaverse and money moved out of the metaverse. And why this is so important is because you cannot have this concept of the metaverse without a social economy. It is both the social aspect and the financial aspect. Those two things must work in harmony. To do money, you need some virtual token to make money work. Money has to be rock solid. That is JP Morgan. That’s the partnership. What’s the value of Tilia? You can’t build a metaverse without user-generated content. You can’t build a metaverse without social interaction. You can’t build a metaverse without some sort of financial token that allows people to build a world.

– Tilia Director (and Linden Lab Executive Chairman) Brad Oberwager to Dean Takahashi in Gamesbeat

He further noted that in strengthening Tilia’s ability to provide these services to platforms, J.P. Morgan Payments are helping to both fuel new economies that directly benefit creators participating in them, allowing such economies to step away from the route of revenue generation through the invasive use of data farming and advertising.

“This is a good thing when creators can make money. There are people around the world who make their living by building things in Second Life …  Here’s why I think it’s so important: these universes are social economies. If you don’t allow people to make money, if you don’t allow this economy to happen, if you don’t support creators, you’re going to have to rely on an advertising model to make your world work. That is a disaster. That would be the worst thing that could hit our society — an advertising-based metaverse.

– Tilia Director Brad Oberwager to Dean Takahashi in Gamesbeat

A great strength with Tilia is that it utilises virtual tokens rather than blockchain-powered crypto-currencies. This means that it is better placed to offer day-to-day virtual currency stability. Crypto-currencies are all too often treated as a speculative securities; they are therefore vulnerable to market volatility, going up and down in value by the day. Such volatility can potentially damage the foundations of any social economy using them.

Add to this Tilia now having such a well-regarded name within the financial markets / payments environment as a strategic partner further enhances Tilia’s standing and reputation – with Oberwager noting that new clients are already “lining up”. At the the same time, the partnership provides J.P. Morgan Payments with access to a market sector that might otherwise prove difficult to access.

More on the partnership can be found in the links below:

Linden Lab announces Tilia partners with Unity “to power virtual economies”

Posted on by Inara Pey
Linden Lab’s Tilia services are now available for Unity developers via the Unity Asset Store

On Wednesday, January 26th, 2022, Linden Lab announced that its subsidiary company, Tilia Inc., the licensed money transmitter and end-to-end payments platform, has reached an agreement with Unity for Tilia’s API and services to be made available to Unity developers as an integrated end-to-end payment solution.

Referring to the agreement as a partnership, the announcement from Linden Lab notes that Unity has vetted the Tilia API to ensure it is suitable and optimised for the latest version of the Unity Editor, and developers building in Unity can now access Tilia’s API through the Unity Asset Store to enable in-game and in-world economies, allowing their users to make and receive payments, and even exchange in-game tokens for real money.

This is potentially the biggest partnership deal Tilia has thus far made (customers until now being reported as Second Life, Sansar and Upland – although ” NFT marketplaces” are also listed as being partners), potentially opening Tilia’s three services – TiliaDirect (in-world payment processing), TiliaWallet (capabilities for “stored value” for assets & enables user-to-user transactions) and TiliaPay (enables the redemption of tokens for fiat (real) money, allowing players to cash out) – to Unity’s entire community of developers.

Many of today’s top games and virtual worlds are built using the powerful Unity real-time 3D development platform and increasingly developers want to incorporate significant virtual economy elements that allow for in-game or in-world user transactions. We are proud to bring an end-to-end payment solution available to the Unity Asset Store, and we look forward to seeing how Unity developers will incorporate Tilia.

Brad Oberwager, Executive Chairman of Linden Research, Inc.

It is perhaps worthwhile noting that this announcement does not in any way mean that Unity is buying or otherwise investing in Linden Lab / Second Life or that they are about to do so (a question I have already been asked). This is about leveraging the power of Tilia Inc., and the services it provides to deliver them to Unity developers who wish to utilise them and, in doing so, provide further revenue streams back to Tilia / Linden Lab.

For further context, please refer to the Press Release from Linden Lab in full.

In the press: Second Life, Tilia Inc & the Metaverse

Posted on by Inara Pey

Friday, September 3rd saw an article by VentureBeat’s Dean Takahashi – no stranger to Linden Lab, Second Life and LL – doing the rounds, entitled Will the metaverse bring the second coming of Second Life? While I personally find the term “the metaverse” to be one of the must frequently over-hyped / over-used terms in recent years, Takahashi’s article makes for an interesting read on a number of levels.

The first is that VentureBeat is a well-regarded tech news and events on-line magazine that includes the supplement GamesBeat that focuses on the world of computer, mobile and video games. Between them, they draw down some 6 million unique visitors a month and 12 million page views. That’s potentially a lot of exposure for articles within the publication, and Takahashi’s article was a headline piece for GamesBeat’s front page (although it has since slipped down the ranking somewhat).

Dean Takahashi, lead writer, GamesBeat

The initial part of the article is something of a re-tread of Second Life’s history for those of us familiar with the platform. While the ground covered may well be familiar (and the quoted numbers possibly subject to quibbling in some quarters), this re-treading nevertheless frames SL for those not familiar with it or were unaware it is still around and doing moderately well for itself.

This part of the article also helps frame Linden Lab as an “elder statesman” (so to speak) of the user-generated content frontier, having long since tackled many of the issues and hurdles that those attempting to now define and provide “the metaverse” are just starting to tackle. All of which makes for good reading and certainly helps carry the message that in this day of Facebook, Microsoft, et al trying to foist their visions of what “the metaverse” should be, Linden Lab has the right to say, “been there, done that – and still doing it!”.

However, it’s the latter part of the article that drew my focus, with its referencing of both Tilia and recent moves on the part of the Lab to develop “partnerships” to try to “grow” SL. Both of these are also parts of the article I’ve witnessed as causing some negative gnashing of teeth in some circles, which has also framed my thinking in writing this piece.

In particular, Takahashi’s revelation that Tilia has cost Linden Lab $30 million has raised eyebrows and some grumblings about what this might mean for Second Life’s future.

via the Tilia website

This needs a little context. While LL has spent what seems like a huge amount of money on Tilia, as Takahashi notes, it has been over a 7-year period, starting not long after Ebbe Altberg joined Linden Lab as CEO, and the initial expenditure was required; as Takahashi goes on to point out, for a company like LL to be able to make pay-outs to users (and generally handle fiat money on behalf of its users) it must comply with a range of US federal, state, and international regulations.

In terms of US requirements, this has meant LL had to become a licensed money transmitter at both the federal and state levels – a move more easily achieved by ring-fencing the services that handle all payment processing / transfer into an entity of their own. Had it not do so, then LL would have hit a wall in its ability to make pay-outs. Beyond this, Tilia Pay’s regulated services benefit Second Life in a number of other ways (allowing the use of credit / debit cards within services such as the Marketplace through to assisting with overall user account management and security, for example).

Obviously given a large amount has been sunk into Tilia, it is natural for the Lab’s new owners to want to leverage this expenditure. But this doesn’t mean Tilia and Second Life are, or will become, an “either / or” proposition for the Lab’s future direction.

Rather if Tilia can be made a success, it would mean that Linden Lab – after more than a decade of trying – has gained a second revenue stream it can utilise to help it remain viable moving into the future. Further, it’s long been the philosophy at LL that as long as SL has users enough to ensure it remains a healthy generator of revenue / income, there is little reason to shut it down / sell it, and I’d question this philosophy being radically altered by the success of a second product within the company’s portfolio.

At the end of the piece, Takahashi brings in the subject of Zenescope, and LL’s focus on “partner collaborations”. This appears to be part of what has been referred to as the drive to grow the user base.

It’s not necessarily a bad idea – working with organisations that have established audiences of their own and which could leverage Second Life to add a new dimension of engagement for those audiences. However, it is one that has some significant hurdles to clear: attractions have to be built-out, events need to be organised and run at a tempo that keeps an incoming audience engaged and coming back at a reasonable cadence to make the effort worthwhile, and their must be a path to a practical return on the investment made (time, effort money), and so on; to say nothing of getting people into the experience and comfortable with the viewer UI.

Zenescope Metaverse a new partnership endeavour involving Linden Lab opened in August 2021, but failed to capture the imagination for me See: The Zenescope Metaverse In Second Life

There’s also the question that, even if successful in bringing an audience to Second Life, just how well such partnerships might actually convert members of the audience into engaged Second Life users – something that will be an important measure of success by the current user base, if not necessarily to LL or their partners, who will likely use other criteria to measure the success of these ventures.

In mentioning such partnerships, Takahashi’s piece open the door to broader thinking around where LL might potentially go with this idea in the wake of of the move to AWS.

For example, it’s already been hinted that at some point, LL might look to offer an “on-demand” product. Doing so could potentially be advantageous to potential partners, in they it present a way for them to offer their users experiences in Second Life at a more advantageous price that a 24/7 product that might only be used once or twice a week. Beyond this, there is the question of whether LL might consider entirely private grids for dedicated partners / clients / markets, and even white-labelling such a capability if they did so (thus essentially providing a Second Life Enterprise style of product in a manner and cost that would be far more appealing that that endeavour).

However, given these thoughts do go beyond the article, I’ll put them to one side for now, and just say that if you haven’t already done so, I do recommend giving Will the metaverse bring the second coming of Second Life? a read.

A further look at Tilia and their new client, Upland

Posted on by Inara Pey
via Linden Lab / Tilia

In preparing my piece on Tilia and the changes coming to US dollar transactions related to Second Life (see: Tilia Pay to handle all Second Life USD-related transactions), I had the opportunity to take a look at the updated website for Tilia Inc., Linden Lab’s wholly owned subsidiary.

For those who may not be familiar with it, Tilia Inc, was established by Linden Lab in 2014, and focused on payments and the compliance work associated with operating virtual economies, including Second Life and Sansar. And now, as shown within the updated Tilia website, it is to provide its services to its first client not to have a direct link to Linden Lab, the property trading game Upland.

For those unfamiliar with Upland (I was until I looked them up), available via browsers and on Android and iOS, it is a trading game in which players buy, develop, sell and / or trade virtual properties that are based on real-world addresses.

The Upland… mascot(?)

Currently focused on the city of San Francisco, Upland is built on the EOS blockchain protocol. It entered a closed beta in June 2019, which ran through until the end of that year. During that period, the company added their own virtual currency – UPX – in August of that year, which users could collect as a reward and in return for collecting properties.

At the start of 2020, the game entered an open beta available to any wishing to play it, and added the ability for users to purchase UPX using selected cryptocurrencies.

The partnership with Tilia means that from later in 2020, Upland will be adding the ability for users to trade their virtual properties (and, I understand, goods associated with those properties) for fiat money (this is, US dollar values), through the Upland marketplace and to cash-out those US dollars, with Tilia Pay being the mechanism by which they do so.

In add the use of fiat money is seen as providing a further layer of value to the game, as Upland’s co-founder Dirk Lueth explained to VentureBeat’s Dean Takahashi in an article that went to press while I was drafting this piece:

By using fiat currency, Upland can stay in compliance with money transmission regulations in the U.S. And in this way, players can actually own the digital goods and properties they buy in Upland … If the game ever shuts down, the players will theoretically be able to take their property and move it elsewhere, in contrast to other games where players don’t really own the objects that they build or trade.

It is Tilia’s ability to provide services fully in compliance with U.S. regulatory requirements, including anti-money laundering, sanctions monitoring, and fraud prevention that could well make it a popular potential partner among companies offering their users to buy / sell virtual goods, as it provides said companies with the ability for their users (and themselves ) to profit in real terms from such virtual transactions.

I’d actually first speculated on the potential for Tilia being used by companies other than the Lab itself back in November 2015. It was was a subject I returned to again in July 2019, again referencing comments made to me in 2015 by the Lab’s former Director of Global Communications, Peter Gray:

Peter’s [2015] statement struck me as interesting in that its structure seemed to suggest that supporting Second Life and Sansar (then still “Project Sansar”) was part of, but also separate to, the overall goal of presenting Tilia as an entity focused on providing a robust payments and compliance system for operating (and managing) virtual economies to third parties.

– This blog, July 2019

More recently, Lab CEO Ebbe Altberg made it clear we would be seeing a growing client list for Tilia at a couple of public events, include the 2020 VWBPE Above The Book session in commenting about Sansar’s future, he also referenced Tilia.

We’re partners with them [Wookey Project Corp] because they’re using Tilia for payments / payouts just like Second Life is doing, and Tilia will have more and more customers over time. We have several of them lined up to be integrated to get those payment services.

– Ebbe Altberg, March 2020

As such, it will be interesting to see who else opts to leverage Tilia / Tilia Pay in support of their platform / game / product in the coming months / year.

In terms of Tilia itself, the website offers a view of the management team – perhaps the first since Vick Forcella helped me with digging into the early days of the company as a Linden Lab subsidiary in November 2015.  Back then, Tilia’s management team was pretty broad, encompassing multiple members of the Lab’s management team, and a small board of three.

Today, the management team is down to three people – Aston Waldman (the Lab’s CFO), Emily Stonehouse (the Lab’s Chief Compliance Officer) and Ray Johnson (the Lab’s VP of Engineering). Aston Waldman is also a member of Tilia’s board, alongside of Kelly Conway (Linden Lab’s former General Council), and fintech compliance and product leader Ben Duranske (the only “non-Linden”, so to speak).

The Tilia Management team and board. Top: Aston Waldman (Tilia CEO and board member as well as Linden Lab’s CFO); Emily Stonehouse (Chief Compliance Officer at Tilia Inc and LL); Ray Johnson (VP Engineering for LL and Tilia) – the management team. Bottom: board members Kelly Conway and Ben Duranske

Also included on the site are a couple of press articles that cover the threat of money laundering through on-line games, helping to further explain the value of services such as those provided by Tilia, and both of which make for interesting reading.

I’ll continue to report on Tilia as news becomes available.

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