Thunes to acquire payments platform Tilia LLC

[Scylla Rhiadra]

14 minutes ago, Coffee Pancake said:

Did you miss what happened to onlyfans.

How about this ACLU petition to mastercard over sex work? https://action.aclu.org/petition/mastercard-sex-work-work-end-your-unjust-policy

I'm not being alarmist here. This is not some imagined fantasy disaster, this keeps actually happening and is something I had hoped of all here, you would be a little more informed about.

OnlyFans is, relative to SL, absolutely HUGE, and much, much higher profile. It's also an entirely different sort of platform.

I am not arguing that companies are not under pressure to remove or hide adult content. I'm suggesting that such moves tend to target embarrassingly high profile platforms. I don't think SL qualifies. And the adult content that is here isn't as high profile as the stuff on OnlyFans. I just don't think anyone is likely to care.

19 minutes ago, Coffee Pancake said:

Our customers is Tilia's corporate customers. So VRChat, Upland, Avatus, Kidari Studio, LEVVE⅃S, Astra and the rest.

I'm not sure that's true: Oberwager no longer speaks as the CEO of Tilia: these are no longer LL's "customers." And in the meantime, we do have this, which is hardly sounding ominous:

This is all highly speculative, and events may of course prove you correct. But I think that the actual language used in these announcements is more likely to support my conclusions.

We'll see!

[diamond Marchant]

I only know two things for sure about Linden Research... it has owners and we are not them.

The Tilia acquisition is part one of an exit strategy. 

Second Life is insignificantly small and not growing. When the cash cow stops mooing, the jig is up. Adult content will not be our downfall. We might be like George Bailey in despair, worth more dead than alive. AI data models need feeding. Linden Research owns the rights to everything that has ever been in your inventory. Connect the dots. Follow the money.

[Coffee Pancake]

18 minutes ago, Scylla Rhiadra said:

I am not arguing that companies are not under pressure to remove or hide adult content. I'm suggesting that such moves tend to target embarrassingly high profile platforms. I don't think SL qualifies.

If it can happen to huge brand platforms that will qualify for meetings ahead of time, we're a wave of a hand away from oblivion.

My point isn't they will object to our antics and rain fire, they might not even notice and just keep pushing the usual 'no smut' policies. oops. Killed a weird game. *shrug*

1 minute ago, diamond Marchant said:

The Tilia acquisition is part one of an exit strategy. 

The 5 year post sale partnership has a Sword of Damocles aspect, what happens then.

[Perrie Juran]

I have not read this entire thread so if this has been asked I apologize.

This acquisition is subject to regulatory approval. One part of the approval process is gathering public comment.

If you oppose this what would you say to the regularity authority?

I don't think "It threatens my Second Life presence" would fly very well.

And if LL did not see that this would scare the bejesus out of its users, that is its Customers, it boggles my mind.

They need to explain how this will affect the Lindex. Any negative affect on the Lindex could destroy the SL economy. The overall stability of the Lindex has been key in SL's survival. Will LL suddenly have to but $L from Thune to fulfill my weekly premium bonus??????

[Kathlen Onyx]

Surely people have other places they can go to for adult content. Maybe not? For those that are sure that this announcement means that adult content will either go away or be highly restricted you should start your research now on what you need to replace it.

I am taking the  "wait and see" approach. After all, we have no control over what happens. Why worry and speculate now?

[Prokofy Neva]

The news article implies "instant cashout". Even if it were shortened from currently 5-7 days to 3 days or 24 hours that would be a vast improvement.

Another improvement would be to enable any account that cashes out to dollars to pay the tier of any other account owned by that legal person.

Currently the solid 5-day wait to get a transfer of Lindens you already turned into dollars is a real burden. I find it is never shorter, and sometimes longer, even.

One good thing currently is that if you cash out with Tillia to PayPal to a business account, you do not have to pay a fee to PayPal *again* (to keep it on PayPal; you still have to pay to transfer it to your bank instantly). I hope that persists.

Just last night a tenant drilled me on whether I thought Tillia was safe with customer data. And I explained at length that I thought it was, because it really seems an annex or spin-off closely tied to Linden Lab via the same board members. Now I'm not so sure. 

[Coffee Pancake]

3 minutes ago, Kathlen Onyx said:

Why worry and speculate now?

Thanks to SL's unique economy, for some, this isn't a novelty or escape. This is their place of work.

Very few have hundreds of USD spare a month to drop on a region without that at least covering it's operating costs. No one has full time job hours to plug into making content year in year out without that paying the bills.

Things are on a razors edge for much of the creator community, this is all a matter of survival.

It's popular here to sneer about those who make a living in and from their activities in SL, but that has been the promise of this platform since the start. It's also one of the only selling points proven to drive growth.

[Love Zhaoying]

3 hours ago, Coffee Pancake said:

If we were all that, Linden Lab wouldn't have decided to sell the asset to begin with.

On the one hand, you say the above. On the other hand, you have disagreed that selling Tilia is a good move.

There is no winning, no matter what LL does.

[Love Zhaoying]

Since Thune will have more payment options, I hope PayPal is one of them.

[Anna Salyx]

My take and understanding is that Tilia was spun off as a wholly separate company with a parent company as a major steak holder. I've been there IRL when my department at big company was spun off to form a newer small company. We were fully independent with some board oversight. We did our own thing for a long time, moved from being a small company to a medium to large company.  And so, at one point the original parent company decided to absorbed us back into the fold (as it were). By *buying us in a merger*. There was a lot of wailing over that because as the spun off company our benefits package was ***way*** superior and we as employees lost a lot being merged back into the original parent company. Surprisingly parent company kept us mostly whole as our own semi-autonomous departments again. It took me about 5 years to get back to where I was benefits wise, and I would never realize the lost upper tiers of benefits. (but they did bridge my time 'away' so that was bonus).   So Tilia being sold off *can* impact Second Life in some ways but how directly impactful will probably be fairly minimal since it is a fully separate entity from Second Life. I could be wrong of course but my previous experience says it's not a wholly doom and gloom thing. We'll see going forward I guess.

13 hours ago, Coffee Pancake said:

 

Or the massive controlling stake it has in the direction of the platform, now from even further away.

 

Thune could easily block adult content in their terms and conditions, or anything else we do, and we have to obey.

Thune could be forced into this trying to build legitimacy of their business making deals with banks and credit providers.

This is how we do a Tumblr.

I doubt that is a real possibility.  Tilia (soon to be Thune) will be a 3rd party payment processor.  People will buy Linden Dollars (L$) and then spend them on clothes, shoes, houses, real estate, and yes, some adulty thing. People cashing out will have gotten the L$s from sales of clothes, shoes, houses, real estate, and yes (again) some adulty things. But at the Tilia/Thune level of interaction the L$ are never associated with any of that. They can't say "this bucket of currency came from this source, that bucket of currency came from that source, and this other bucket of currency was a mix of the two". They are all just a buckets of currency, nothing more and the clearinghouse/payment processor will do it's thing, collect their middleman fees and carry on.  Since there is that insulating layer, I'm not sure how much actual control this new thing will have on a third company.  It's not like Tumblr which was bought in whole by a company that then decided to make changes to their property.  Second Life is not becoming a part of Thune, or even a subsidiary, as I understand it from my article reading.

 

13 hours ago, UnilWay SpiritWeaver said:

As others have noted - the problem with payment system switches is that payment companies have gotten it into their heads to "think of the children" all of the time, and no one ever wants to "think of the adults."

That's not just about "adult content" but also about adult-aged content...

Things folks who are grown up like to do, talk about, experience, etc. are not just 'NSFW", but also anything SFW as opposed to 'SF-preschool.

Banks and payment processors have decided to moralize on everyone, and can get away with it because they're holding people's money hostage. Changing payment systems puts things back into uncertain waters. Panic waters? No. Just uncertain.

 

See my above. 

This is different in some significant ways from where banks and payment processes have worked to "moralize" their involvement in the adult entertainment industry. They have done this with specifically adult oriented enterprises. They mainly "moralize" it because they don't want to be on record as being a part of a specifically adult oriented business. Second Life is not a specifically an adult oriented business. any more than X née Twitter is. Yeah, a lot of adulty stuff exists on that platform but that not who they are as a platform and so Banks and Payment Processors don't have much leverage or muscles to flex in terms of content or content policy. So long as they can have a PR plausible separation form prurient enterprises, they move money and collect their fees.

again just my first thoughts take.

Edited April 24 by Anna Salyx
reword a sentence for clarity.

[Nika Talaj]

2 hours ago, Perrie Juran said:

This acquisition is subject to regulatory approval. 

By what agency? Both companies are private, so there are no shareholders, only investors who are represented by the boards of both companies.

3 hours ago, diamond Marchant said:

The Tilia acquisition is part one of an exit strategy. 

Second Life is insignificantly small and not growing. When the cash cow stops mooing, the jig is up. Adult content will not be our downfall.

You may be right. You could even say that the Tilia acquisition is part 2, with part one being the departure of LL's VP engineering and VP marketing in January. You could further project that LL expects the exit to be complete within 5 years, given that that's the stated duration of the Thune partnership.

[I doubt that LL would sell user data and content to an AI company, even if technically they have the right to do so. They would be begging for a class action suit.]

BUT .. 5 years is a long time, and a lot could happen. Sl's user base could dry up and blow away naturally. Or, a large, dedicated contingent could simply continue nearly indefinitely, and some weird employee buyback scenario could unfold, if Patch, Grumpity and possibly Oberwager were interested. Or Thune could dry up and blow away, and LL might then be unable to find a payment partner (seems unlikely to me, but stranger things have happened). Or the Thune partnership could simply be extended.

Again, you could be right. Personally, I find this all very, very interesting, and I'm willing to wait and see. Oh, and I want to commend everyone on this thread for a really Thought-Provoking discussion.

Edited April 24 by Nika Talaj

[JacksonBollock]

It's been a few years since I last visited Secondlife but, having seen the recent announcement, I thought I'd swing by and see what the Forum thought of all this.

As an objective observer and somewhat analyst in this space, a possible view of this is as follows:

Tilia Timeline
(my recollection - so possibly not 100% correct - particularly around timings of JP Morgan and Dunamu)

2019: Tilia officially operational within Linden Lab, handling financial transactions and managing compliance for Second Life. This setup allowed users to buy, sell, and cash out Linden Dollars seamlessly, integrating real-world financial transactions with the virtual economy.

2020: Linden Lab was acquired by an investment group led by Randy Waterfield and Brad Oberwager. This acquisition aimed to support continued growth for Second Life and expand the financial services of its subsidiary Tilia.

2022: Tilia was spun off from Linden Lab as a separate company, focusing on providing financial services tailored for digital economies, including gaming platforms, virtual world publishers, and NFT providers. After its spin-off, Tilia secured strategic investments from J.P. Morgan.

2023: Tilia received additional strategic investment from J.P. Morgan Payments and dunamu, aiming to help Tilia expand its services and support a broader range of transactions in the digital economy

My Overview:
The Thules move appears to be the fruition of a 5 year strategic plan initiated in 2020 by Waterfield and Oberwager.

One common misconception (in my opinion) might be viewing Second Life as the primary value asset in Linden Lab’s portfolio. In my analysis, since 2020, Tilia has emerged as the segment with greater growth potential, increasingly recognized and cultivated by Linden Lab and market observers alike for its promising future and exit value.

Tilia represents both a modern and potentially lucrative technology stack, as well as a relatively low friction licensed entry point into the lucrative US digital payments ecosystem.

By separating Tilia from its umbrella, investors not only streamlined Linden Lab’s operations but also potentially increased Tilia’s market value as an independent entity—ripe for acquisition. Moreover, this strategy aligns with typical private equity plays, which focus on boosting short-term financial metrics and preparing companies—or their most profitable parts—for sale.

The implications of these strategic divestitures for Second Life look pretty fundamental.

While the official stance positions the sale of Tilia and the subsequent partnership with Thunes as a boon for payment processing capabilities, a deeper analysis suggests otherwise.

The five-year exclusive partnership with Thunes, while ostensibly a stability measure, could well be the timeframe investors see as sufficient to wind down operations. This timeline may not only allow for the amortization of remaining assets but also the management of user transition or platform shutdown with minimal disruption.

With the tech landscape evolving rapidly, Second Life’s technology and user engagement models appear increasingly dated. Without significant reinvestment—a prospect made unlikely by the current strategic direction—Second Life might struggle to retain its relevance in the coming years.

My Forecast (for what it's worth)
While it may appear that the funds generated by the sale of Tilia represent a windfall for Linden Lab, a substantial amount of those funds are destined for the pockets of JP Morgan, and Dunamu. Whether the balance is destined for reinvestment in Secondlife, or simply as dividends paid directly into the coffers of Randy Waterfield et al, is yet to be seen.

If I were still an active resident, I wouldn't count on much longer than 3 or 4 years of continued enjoyment of SL.

Which is still a pretty good outlook for any legacy technology platform in this environment. So not all doom and gloom!

Edited April 24 by JacksonBollock
format

[Innula Zenovka]

2 hours ago, Nika Talaj said:

4 hours ago, Perrie Juran said:

This acquisition is subject to regulatory approval. 

By what agency? Both companies are private, so there are no shareholders, only investors who are represented by the boards of both companies.

Electronic money transfer is a very highly regulated business, though, and Tilia is licensed in 48 states and territories to engage in it.    Presumably all 48 licensors will need to approve the transfer of ownership and new management structure.   This may be just a formality but I would think it has to happen.

[Nika Talaj]

17 minutes ago, Innula Zenovka said:

 This may be just a formality but I would think it has to happen.

True.  " ....pending regulatory approval..."

https://fintech.global/2024/04/24/thunes-expands-us-footprint-with-strategic-tilia-acquisition/

 

Edited April 24 by Nika Talaj

[Caitlin Tobias]

17 hours ago, Jackson Redstar said:

I can remember even after having had a verified paypal account for over a decade, when Tillia came around I had to get get 're verified' which included among other things, dancing on one leg in a pink sock while the other was wearing blue, naming each of my 10 toes and the reason I chose those names, identifying 100 different species of birds along with naming the last 200 transactions on Linden, the exact amount and the reason for them.  Sure would hate to go through all that all over again!

Omg. I had a similar experience. I even had to send in a copy of divorce papers to prove that my rl 'new' last name was actually my maiden name, which they found 'suspicious'...

[JacksonBollock]

22 minutes ago, Nika Talaj said:

True.  " ....pending regulatory approval..."

https://fintech.global/2024/04/24/thunes-expands-us-footprint-with-strategic-tilia-acquisition/

 

Thunes would require Financial Regulatory Approval at both federal and state level, as well as Consumer Protection and Anti-Trust Regulatory Approval.

Given the fact that both companies have officially announced the acquisition, it's typically safe to assume that a significant amount of preliminary work has already been done, including engagement with the necessary regulators at Federal and State levels.

Other aspects would include things like Due Diligence , Legal and Compliance, and Stakeholder Communication Strategy.

Companies don't usually go public with announcements of this magnitude without a high degree of confidence that approval will indeed be received.

Edited April 24 by JacksonBollock

[Theresa Tennyson]

13 hours ago, Coffee Pancake said:

If the payment processor says no smut. We're dead. This is not a reach. This has happened several times now, we have been immune as we owned the payment processor, now we don't.

If that was going to happen it could have happened already. Second Life is/was still dependent on credit card companies for money coming in and Paypal, etc. for money going out.

[Love Zhaoying]

2 hours ago, JacksonBollock said:

My Overview:
The Thules move appears to be the fruition of a 5 year strategic plan initiated in 2020 by Waterfield and Oberwager.

It definitely makes sense to create a separate company with the intent of selling it for profit. Profit is good! Profit keeps Second Life going!

[Qie Niangao]

2 hours ago, JacksonBollock said:

With the tech landscape evolving rapidly, Second Life’s technology and user engagement models appear increasingly dated. Without significant reinvestment—a prospect made unlikely by the current strategic direction—Second Life might struggle to retain its relevance in the coming years.

Since the Waterfield / Oberwager purchase, LL has poured quite a lot of investment in the Mobile viewer and other platform updates (notably, viewer-side, glTF compliant "PBR" materials, and server-side, the most expansion to the scripting library since it started). These may make SL more saleable, or to keep it viable as an operating asset, but they'd be money wasted if the plan was to just milk the cash cow for a few more years.

(IIRC it started before the LL purchase, but they also invested a lot to migrate from data center hosting to AWS, necessary to keep the business viable, but also making it more saleable.)

2 hours ago, Nika Talaj said:

You could even say that the Tilia acquisition is part 2, with part one being the departure of LL's VP engineering and VP marketing in January.

Or cause-and-effect might be reversed. Prospects of some Tilia acquisition would have been in the C-suite aether for a while. Unlikely that pushed the VP's out the door but might well have delayed exec hiring until it was clear what's to become of Tilia. (Tilia currently has separate engineering and marketing, right? If Oberwager couldn't sell it off, they'd be pretty much forced to streamline it to legal and operations only, so LL engineering and marketing would need to absorb it.)

4 hours ago, Coffee Pancake said:

Thanks to SL's unique economy, for some, this isn't a novelty or escape. This is their place of work.

This is tragedy waiting to happen. Anybody with options to diversify should be exercising those options. Even in the best of times it's just crazy risky to stake one's livelihood on a single game. But now, never mind this Tilia kerfuffle, anybody in any kind of game development must be hunting for AI-immune niches—which will be few and far between in that industry. SL may remain fun for artisanal mesh hobbyists, for example, but what do you really think is going to be producing those fancy future glTF scenes? Will you be prepared to paint with those AI brushes?

All about sex

To organize some tunes for the paranoia bandwagon, yeah, LL's owners must surely be weighing the future of Adult content in SL because:

• Payment processing may get marginally messier with only a minority stake in Tilia, unspecified (to us) contractual obligations, and no readily available alternative.
• Mobile is a dead letter without listing in Apple Store and Google Play Store. I've heard rumors that Apple may admit pr0n, but it's another hurdle to clear. If it's Mobile or Adult, one or the other, that's a hard call.
• That absurd Medium piece got the gullible so riled up that the Lab is forced to concoct some policy response. What we've heard so far is sleight-of-hand about child avatars—the usual suspects and always a crowd pleaser—so response to any real issues is still vague.

So yeah, if I were Oberwager, I'd be considering whether Adult is really worth it. In that position, wouldn't you?

On the other hand, Adult content is important as an ongoing market differentiator for SL. It's not something an owner would just abandon without serious analysis.

Edited April 24 by Qie Niangao
minority, not majority stake

[Love Zhaoying]

2 hours ago, JacksonBollock said:

If I were still an active resident, I wouldn't count on much longer than 3 or 4 years of continued enjoyment of SL.

20+ years has been a good run.  So why are so many people acting like "things that have a beginning" don't necessarily also "have an end"?

It's not the "end of the world", no matter what happens.

[Love Zhaoying]

1 minute ago, Qie Niangao said:

Since the Waterfield / Oberwager purchase, LL has poured quite a lot of investment in the Mobile viewer and other platform updates (notably, viewer-side, glTF compliant "PBR" materials, and server-side, the most expansion to the scripting library since it started). These may make SL more saleable, or to keep it viable as an operating asset, but they'd be money wasted if the plan was to just milk the cash cow for a few more years.

(IIRC it started before the LL purchase, but they also invested a lot to migrate from data center hosting to AWS, necessary to keep the business viable, but also making it more saleable.)

Or cause-and-effect might be reversed. Prospects of some Tilia acquisition would have been in the C-suite aether for a while. Unlikely that pushed the VP's out the door but might well have delayed exec hiring until it was clear what's to become of Tilia. (Tilia currently has separate engineering and marketing, right? If Oberwager couldn't sell it off, they'd be pretty much forced to streamline it to legal and operations only, so LL engineering and marketing would need to absorb it.)

This is tragedy waiting to happen. Anybody with options to diversify should be exercising those options. Even in the best of times it's just crazy risky to stake one's livelihood on a single game. But now, never mind this Tilia kerfuffle, anybody in any kind of game development must be hunting for AI-immune niches—which will be few and far between in that industry. SL may remain fun for artisanal mesh hobbyists, for example, but what do you really think is going to be producing those fancy future glTF scenes? Will you be prepared to paint with those AI brushes?

All about sex

To organize some tunes for the paranoia bandwagon, yeah, LL's owners must surely be weighing the future of Adult content in SL because:

• Payment processing may get marginally messier with only a majority stake in Tilia, unspecified (to us) contractual obligations, and no readily available alternative.
• Mobile is a dead letter without listing in Apple Store and Google Play Store. I've heard rumors that Apple may admit pr0n, but it's another hurdle to clear. If it's Mobile or Adult, one or the other, that's a hard call.
• That absurd Medium piece got the gullible so riled up that the Lab is forced to concoct some policy response. What we've heard so far is sleight-of-hand about child avatars—the usual suspects and always a crowd pleaser—so response to any real issues is still vague.

So yeah, if I were Oberwager, I'd be considering whether Adult is really worth it. In that position, wouldn't you?

On the other hand, Adult content is important as an ongoing market differentiator for SL. It's not something an owner would just abandon without serious analysis.

Great analysis!

 

[Rowan Amore]

I thought the only people promised the ability to make a living from SL were.people who worked for LL.  I don't remember anyone saying " Make SL Your RL job!".   

[JacksonBollock]

3 minutes ago, Love Zhaoying said:

It definitely makes sense to create a separate company with the intent of selling it for profit. Profit is good! Profit keeps Second Life going!

Profit is what's left after you pay everyone you owe - which in the case of Tilia is quite a few people.

Once you decide what your profit is, you decide what to do with it.

Do you take it in the form of dividends as return on risk, or do you leave it on the table for another spin of the wheel?

It all depends on whether you think SL is a good bet or not.

[Qie Niangao]

3 minutes ago, JacksonBollock said:

Profit is what's left after you pay everyone you owe - which in the case of Tilia is quite a few people.

That's interesting. Are there employment terms contingent on Tilia not being sold? Or is this about the JPMorgan Chase stake, which presumably went along for the ride, right?

[Paul Hexem]

My guess is they don't care about SL at all. A company doesn't buy something like Tillia because they think it's nifty and they just gotta help LL and their customers. A company buys Tillia because they intend do something with it to make a profit from it.