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Rovio Mobile, Developer of Angry Birds, Gets $42 Million in Funding
The newest overnight sensation of the digital gaming industry has now officially been crowned. Rovio Mobile, a tiny mobile gaming company out of Finland run by Niklas and Mikael Hed (cousins), has ridden their Angry Birds game to lofty marketplace success (40 million active users) and a financing round of $42 million USD, led by Accel Partners and Atomico Ventures.
Of course, someone gets the obligatory board seat, and in this case, that someone is Niklas Zennstrom, a co-founder of Atomico Ventures, as well as another company named Skype. He is going to sit on the board of Rovio Mobile, his new investment. He also issued the even-more-obligatory statement, saying, “Angry Birds is one of the fastest-growing online products I’ve seen, growing even faster than Skype, and the company has done a brilliant job of extending it across different platforms and merchandise.”
It’s worth noting that little Rovio put out 50 titles before they went platinum with Angry Birds, courtesy of the explosion in smart phones; now that they have a thoroughbred in their stable, they intend to ride that horse until they can breed another winner.
Rovio, for their part, says that they are going to use the money to expand Angry Birds across platforms (i.e. gaming consoles) and across geography, with international reach planned. Rovio is also developing additional titles. The company currently has only 50 employees, so some considerable uptick in SG&A costs is probably in the near future as well.
The $42 million is a staggering amount compared to the money most technology start-ups get these days, with the average amount of first-round funding in the United States currently at a much more modest $3 million. In Europe, first funding is even stingier – the average tech start-up in Europe gets only $1.8 million USD in the first go-round.
Obviously, Rovio’s venture capital partners really, really believe that the company is going to be bigger and better in no time at all.
Rovio must believe it, too, because they should have enough money on hand to fuel a pretty good-sized expansion, with profits of approximately $57 million attributed to Angry Birds in 2010. One can only assume that the company has very big plans indeed if it thinks it needs all the cash it has on hand, PLUS, the cash from the funding round, for expansion.
Well, that’s probably an accurate assumption. Rovio’s marketing head Peter Vesterbacka, in a profile done by Wired magazine in April’s issue (already out), referred to Disney when he mentioned their humble beginnings (a single Steamboat Willie cartoon) and their behemoth status today as an extremely profitable mix of toys, movies, comics, games, etc. The comparison he wished to impress upon the reader of the piece was abundantly clear.
All this from a company that almost declared bankruptcy at the beginning of 2009. You have to love that.
Brendan Moore is a Principal Consultant with Cedar Point Consulting, a management consulting practice based in the Washington, DC area, where he advises businesses in marketing, sales, front-end operations, and strategy. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.
$42m Series A Investment in Rovio
Accel Partners and Atomico Ventures Co-Lead Investment Round with Felicis Ventures Participating
Espoo, Finland – 10 March, 2011 – Rovio, the creator of the Angry Birds entertainment franchise, today announced a $42m Series A investment in the company to facilitate its strategic expansion. Currently, Angry Birds is played by 40 million monthly active users, and the game has grown from an App Store success to become one of the most recognized entertainment franchises in just over a year.
The funding round was co-led by Accel Partners, the venture capital firm known for working with fast-growing companies including Facebook, Groupon and AdMob, and Atomico Ventures, the venture capital firm created by Skype co-founder Niklas Zennström. Leading super angel fund Felicis Ventures also participated. Niklas Zennström, who also co-founded Kazaa and Rdio, will be joining the board of Rovio.
Rovio has ambitious plans that the investors endorse and will facilitate. The investment will transform Rovio’s growth, allowing it to increase its reach internationally, and across markets including mobile, social media and other platforms, and via merchandising and media production and partnerships. “With Angry Birds, we have successfully launched not only a strong new brand, but also a whole new entertainment franchise,” said Mikael Hed, CEO and co-founder of Rovio. “Angry Birds will continue to grow, and we aim to create more similar success stories. We will strengthen the position of Rovio and continue building our franchises in gaming, merchandising and broadcast media.”
“The proliferation of touchscreen smartphones and tablets has lead to a huge growth in demand for mobile entertainment”, said Rich Wong, Partner at Accel Partners. “These growth trends are changing the entire media field, and Rovio is perfectly positioned to drive this change. We believe this is just the beginning.”
“This investment will give Rovio wings,” said Niklas Zennström, CEO and Founder of Atomico. “The company has an outstanding management team and is a category winner with huge potential, making it precisely the kind of company we like to back. Angry Birds is one of the fastest-growing online products I’ve seen, growing even faster than Skype, and the company has done a brilliant job of extending it across different platforms and merchandise. I’m really looking forward to joining the board, and helping the team to fulfill its ambitions.”
“The passionate consumer response to Angry Birds has been nothing short of a phenomenon, proving that the powerful consumer experiences can win dedicated players across all demographics,” said Aydin Senkut, Managing director of Felicis Ventures. “We’re very proud of the amazing success that the Rovio team has experienced since we began working together last summer.”
Rovio recently announced that sales of Angry Birds plush toys have passed 2 million units. The commitment and retention rate of Angry Birds fans remains high, as does the demand for Angry Birds virtual goods: 40% of new customers on the iOS platform purchase the Mighty Eagle downloadable content.
Rovio has been expanding steadily through 2010 and 2011, and has 50 employees in Espoo, Finland. Currently, Rovio is busy expanding Angry Birds to even more gaming platforms and forms of media. The company has earlier announced plans to roll out an online Angry Birds experience towards summer 2011, as well as developing Angry Birds games for all major consoles later in the year.
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|Last Updated on Thursday, 10 March 2011 22:04|