Rovio Seeking Funding At $1.2B Valuation?
Bloomberg has a story on Rovio, the makers of Angry Birds, that they'd be looking for financing at $1.2B valuation. Bloomberg refers to two people familiar with the matter, but does not disclose who they are. What makes this financing talk a little more interesting (not that it would need to be at such valuation) is that Rovio is said to be in talks with a company in the entertainment business to take on a strategic investment. Similar offers have been rejected from large institutional investors Bloomberg's sources said.
Unity Technologies Closes $12M In Financing - Eyes Asia
Unity Technologies, a Copenhagen originated startup now based in Silicon Valley, has closed a $12 million in financing from WestSummit Capital in China and iGlobe Partners in Singapore, according to Techcrunch. The financing round is Unity's second and an investor from the first round, Sequoia Capital, also participated in the round.
Game Fundings And Acquisitions $1.89B In 2010
Venturebeat has a story out on 2010 and how game fundings and acquisitions developed compared to 2009. Growth was spectacular and in terms of percentages, the size of the fundings and acquisitions rose by 130% compared to 2009. Thus in 2009 the overall size of the market in these terms was $819 million. The data is provided by IHS and is said to cover international markets. According to IHS, the numbers cover funding and acquisitions activity in all areas of gaming except mobile gaming.
Did Supercell Just Receive Funding?
Back in February we covered a new Finnish gaming startup called Supercell. It was founded by Mikko Kodisoja, one of the gaming gurus in the Finnish gaming industry. Supercell also received a significant amount of funding from London Venture Partners' Phil Harrison (ex-Sony global studio director), David Gardner, (ex-EA COO, one of the early investors into Playfish), David Lau-Kee, Paul Heydon, Initial Capital LP (fund founded by serial entrepreneurs) as well as Jari Ovaskainen (ex-Iobox CEO). However, Petteri Koponen, one of the founders and early stage investors in Lifeline Ventures tweeted something interesting before and during the weekend.
An Experiment In Pay What You Want Pricing
Two guys named Dan Provost and Tom Gerhardt announced their second project on Kickstarter after their successful Glif-project. Glif, a simple accessory for the iPhone 4 was a huge success on the Kickstarter, a crowdfunding platform, where it raised $137 417 from 5273 backers. Their new project, the Cosmonaut, is a wide-grip stylus pen for touch screen devices.
This project too, has attracted immense interest in a couple of weeks. However, the more interesting part of all this is the experiment the gentlemen did with a pay what you want pricing concept. Backers of The Cosmonaut could choose whatever amount the wanted, but there were only 3000 slots available and they needed to raise $50 000 to go ahead with the project. Dan Provost recently published a blog post explaining what people pledged when they were given the freedom to choose what they wanted to pay for the product.
2010 Was A Good Year For Venture Capital
I turned to Nexit Ventures for opinions on 2010 for the venture capital industry. I received both comments and a lot of good research data regarding VC investments in the US. The data is based on Fenwick's recent survey on Q4 VC activity. In short, 2010 was a good year for venture capital. Almost all metrics were pointing higher, except for one: raising funds for venture capitalists was still difficult and was at its lowest since 2003.
GetJar Raises $25 Million In Third Round Of Financing
MobileBeat announced yesterday that GetJar has raised a whopping $25 million in its third round of financing. GetJar's founder and CEO Ilja Laurs is from Lithuania, but the company has been headquartered in the US for many years. This round of financing came from Tiger Global Management and Accel Partners. Accel Partners also led the two previous rounds. With the third round of financing, GetJar has raised in total $42 million.
Nokia Growth Partners Invests $8 Million Into Voddler
Nokia Growth Partners is the leading investor in the latest financing round for Voddler, a video streaming service for the Nordics. Back in September, Elisa, a Finnish operator received approximately 10% of Voddler's stock for 40 million Swedish kronor. Back then, the company was valued at approximately 30 million euros.
Which One Should It Be - Angel Investors Or Venture Capital?
I wanted to talk to Nexit Ventures, as the year is about to come to an end, about the differences between angel investors and venture capital - how should the entrepreneur view the changing financial market, as well as what are some of the basic rules in deciding which of the alternatives in financing should the entrepreneur go for. We came up with five basic rules that differentiate angels from venture capital. Naturally these are simply generalisations and there are exceptions as always.
Futureful - A Predictive Discovery Engine
Futureful is a Finnish, research based startup that is developing a predictive discovery engine. In essence, they want to help you discover more interesting content on the internet, based on your behaviour and liking. The company was founded by Marko Anderson and Jarno Koponen and they pitch themselves as "imagine if Hunch and Flipboard bootstrapped a lovechild."
Swedish E-mail Efficiency Provider CronLab Closes Financing
The Sweden based Cronlab, a provider of different anti-spam solutions, has closed financing to further speed up its sales and widen its product offering. The financing round is Cronlab's first and was raised from different European angel investors. The size of the round, nor the investors were not disclosed. Cronlab offers both anti-spam hardware solutions, but also SaaS alternatives as well as hosted solutions.
Cronlab is a small Swedish company, that created only 91k kronor (10k€) in revenues in fiscal year ending April 2010. However, in the fiscal year ending April 2009 they generated revenues of approximately 1,4 million kronor (150k€). Update (20.10.2010): The figures represented above only account for CronLab's Swedish business. Cronlab moved their business to UK in 2010 and thus the figures do not completely show their business potential or state of it.
Mediatonic Invests Into Nitro Games
Mediatonic, a new Finnish based fund, has invested into Nitro Games. Nitro Games is a Finnish gaming house that has created games such as Raven's Cry and East India Company. The games fall into the strategy genre and made for the PC. The investment size was not disclosed. Mediatonic won't become a share holder of the company as it invests into the revenue share of future income thus making it an attractive investor for entrepreneurs.
Alternative To Company Valuation For Startups
Guest post by Andy Cars, the founder and CEO of Seedcap AB based in Stockholm. Seedcap AB help entrepreneurs and start-ups to raise capital. You can read Andy's previous post on the 10 Mistakes Entrepreneurs Often Make When Raising Capital here. Here Andy talks about an alternative to locking-up your valuation too early.
Many entrepreneurs that seek external capital to finance their startups often find the valuation of their companies difficult. How do I know what my company is worth? Moreover, by its very nature the founder often believes his company to be worth more than what the investor is prepared to accept, which in the end leaves the founder without a deal.
TradeShift Looking To Further Digitalize Payments
There's a startup in Denmark that went by the name of Porta for a long time. Since then, they have changed their name to TradeShift. TradeShift is looking to disrupt and shatter the oligopolies of EDI between large corporations and banks so that the technologies could be used by anyone - small and medium sized companies included. The founders of the company include an experienced bunch. They are Christian Lanng, Mikkel Hippe Brun and Gert Sylvest. Not a founder, but onboard the project is also Morten Lund who made himself famous by his personal bankruptcy some two years ago.
Mediatonic Fund I Starts Financing Games and Media Products
Mediatonic Management has closed a 5 million euro fund that will begin to finance games and media products from Finland. The fund has been set up by investments from Fennia insurance, Henki-Fennia insurance as well as the Sonera Pension fund. People behind the fund include Tanu-Matti Tuominen and Marko Tulonen.
The fund is a project and catalog fund that will invest in commercial games, television formats and web services. The fund does not invest into the companies in the manner a venture capitalist would invest, but into the rights of the products and services sold. Therefore the fund's business model is to take a commission from cash flows generated by the products and services sold.
John Liljelund Of AW-Energy
I talked with John Liljelund, the CEO of AW-Energy in Lahti, Finland a few weeks ago in the Cleantech Venture Forum. He discussed various aspects in how the company was founded and where they are at the moment with their product. Not only is the story behind the company very interesting, but he goes through in detail the different stages of investment the company has received including his own march to become the CEO of the company. AW-Energy develops a product called Waveroller which harnesses energy from the energy of the waves.
Investment: Sopima Closes A €1m Round
Every Friday we will feature an Investment and aim to break it down as closely as we can so our audience will get an idea of where the money comes from.
Sopima, a Finnish company building an online contract bank that aims to enable productivity improvements into the way organizations manage their contracts secured a €1m funding just a while ago.
Sopima is developed for all sizes of companies to keep their contracts in order, be able to manage all commitments made. As a web service Sopima enables you to do this together with your business partners, regardless where they are located. With Sopima every party has the entire contract constantly at arms length, and thus the contract becomes integral part of the daily business.
We dug a bit deeper to see where a web startup like Sopima would get its funding in Finland.
Fruugo Secures More Financing From Current Shareholders
According to a Finnish business periodical, Talouselämä, Fruugo has secured more financing from its current shareholders, Jorma Ollila, Risto Siilasmaa and others. We previously wrote about Fruugo laying off 40% of its staff to cut its burn rate. At the moment, 25-30 people work at Fruugo.
Using A Sales Process for Venture Capital
Daniel Blomquist from Creandum venture capital firm wrote lately how entrepreneurs should focus more on which VC to approach than how to approach. He argues that you can make more out of your time if you try to find out and select the most prominent VCs for your firm beforehand. As Ville Vesterinen and Daniel mention in successive post's comments, it is a sales job. But a bit of clarifying could be used to point out the similarities and try enlighten the whole process further. The fund raising process seems to be somewhat comparable to business-to-business selling process.
Traveas Goes Public On AktieTorget
The Swedish travel startup Traveas is going public - it will be listed on AktieTorget, the stock exchange for developing companies. They will be offering Traveas stock for the public between 7th of May and 25th of May. Trading with Traveas stock will begin on 26th of June. Traveas pre-money valuation is at 17,5M SEK (1,65M €)
We had a brief chat with Jack Melcher-Claësson, co-founder of Traveas about the listing. Jack told us that there are basically two factors in why this new stock emission is interesting. Firstly, as we told in the title Traveas will become a public company. Secondly, the reason for them gathering up money is the need to be able to run faster in the European market. Their press release tell us that they are looking for an investment around 3,5 M SEK (330k€).
SoundCloud Made The Big Dream A Reality
SoundCloud, a music and audio sharing service for artists, has been gaining momentum and rapidly growing their user base since the launch of the service last October. They have gone from 20,000 users to 100,000 users in a matter of six months.
Not only have they grown fast, they also just raised €2.5 million (roughly $3.3 million) in about 4 months. When we met SoundCloud at Le Web last December they were just starting to talk to VCs. Just last Thursday they signed the papers for the €2.5 million, which should give them a run way of roughly two years.
It also seems that SoundCloud is all the rage at The Next Web Conference and one of the hottest startups present based on the number of interviews co-founder Alex Ljung is doing. I talked to Alex at the venue about SoundCloud and the experience so far. He told me about the process of raising venture capital in the current economy, what they want to do with the money and how it all got started with SoundCloud sometime in 2006 in Stockholm, Sweden.
Finland Puts €45 Million Into High Growth Incubation Fund
Finland's Minister of employment and the economy, Mauri Pekkarinen, has announced last week that Finland will be adding more capability to commercialise innovations with a €45 million fund. The fund is put together from governmental organisations such as Tekes and Finnvera's seed financier Vera.
The aim of the new fund is to attract more international talent from overseas to help the companies grow and also enable more targeted investments. One of the ways international talent is attracted is the financial upside. The goverment is willing to invest into these companies, if a private sector individual (person or organisation) invests. Thus the financial upside is the invested amount in the company.
Casual Gaming House Playdo Raises $4.3M
Playdo AB, a Sweden based casual gaming house, has raised $4.3M financing round led by Miniclip Ltd. and Northzone Ventures in December 2008 (via). Playdo has been creating casual games since 1999 and has also entered the market for virtual worlds with Spineworld, a game released in April 2008. The financing was organised by GP Bullhound and will be used for development of Spineworld, as well as marketing and sales of the game.
Eventhough Spineworld is a relatively new game, it already has some one million registered users. It is distributed through Miniclip. Miniclip is one of the most famous casual gaming sites in the world and thus explains the success behind Playdo's games. The business model behind Spineworld is simple, users pay a €3.95/month membership fee which gives them access to quests, virtual goods, and other features in the game.
What's Your Need Of Financing?
i2m - Ideas to market, a UK based research firm, has released some very interesting figures in terms of startup financing, according to Sun Startup Essential Blogs. They have researched some 800 entrepreneurs and small business owners over a variety of areas.
The key findings of the financial research has shown that about 40% of startups seek under 10,000 GBP to become profitable while 30% seek between 10,000 and 100,000 GBP to become profitable. Only about 15% of startups seek more than 100,000 GBP to become profitable.
In the findings, Permjot Valia, a business angel and member of the British Business Angel Association describes that the engine of Britain's entrepreneurial industry is friends and family. If you take this thinking to the Nordics, I'd say the results would be tilted towards the 100k€ mark.
This of course raises questions of other sorts - are we really able to bootstrap up here? Do we take the financial status for granted and regard that something as of a given right even in a startup? Provocative questions to ask, but what are your thoughts - which category would you reckon would be the largest in your home country?
Photo by jenn_jenn.
Gaming Defies Down Turn With Venture Capital
Jussi Laakkonen, CEO of Everyplay, has done extensive research in terms of investments to the gaming industry in the recent years. We also covered Jussi's previous findings in ArcticStartup close to two months ago when he reported that approximately 2 to 4 million USD are invested into the casual gaming market each week.
Jussi has compiled a nice 2 blog post analysis into the market with discoveries such as investments peaking in July 2008 to the amount of 71M USD in total to the industry. He has also added the MMORPG market to the analysis. It's clear that the two largest segments in the gaming industry, receiving funding are the MMORPG and the casual gaming segments.
Some of the largest investments made were 9You's 100M USD, 83M USD into Big Fish Games, 29M USD into Zynga Games and Gaia's 11M USD financing rounds.
So with regards to my previous post on Betware from Iceland, I asked whether we should cover the gaming industry more, a clear answer from you was - yes, please. We'll get more insight into this industry in the future as the market is one of the most attractive ones in many ways, not only investments, at this moment.
However, have a read at the full analysis into the investments by Jussi Laakkonen of Everyplay - Part 1 and Part 2.
Photo by A*A*R*O*N (CC:by-nc-sa)
Good Times: Rest in Peace
The recent weeks' downturn in the global economy has dramatically tightened the availability of funding for companies, not only startups but large companies alike. The downturn that started from the US with the uncovering off the sub-prime "fraud" has echoed its effects to all corners of the world as connections between financing houses begin to unravel.
Sequioa Capital, one of the most famous startup financing houses in the US, has held a secret meeting earlier this week. A slideshow from the meeting has fled to the public unraveling the contents of the meeting - short and long term scenarios for the world economy. The contents of the document are not very positive. If the name of the presentation is "RIP - Good times", I think it says all.
I've also heard while discussing with Nordic entrepreneurs that the financing market has, also in Europe, tightened dramatically. This of course means that those seeking funding rounds form the public will face tougher times in years.
I'm expecting we'll see a huge rise in applications to the government institutions that support and finance entrepreneurs as the private markets tighten. It is natural for entrepreneurs to seek financing at all costs, as it is their only way to survive if they do not have a positive cashflow. This however, in my opinion and even at the cost of receiving a ton of hate mail, does not give the institutions any right to loosen their funding - just to support the companies and keep people employed.
This may seem harsh, but the Nordic startup scene is still very small in terms of employment and thus does not pose a great threat to the GDP. Times like these serve as natural ways to bring about healthy change to the markets with companies that are truly innovative and have a chance of becoming profitable in the near future (ie. are already showing healthy amounts of revenue).
One must also remember that even in difficult times, it is usually the strongest that survive - creating more value in the long run to the individuals as well as economies they serve.
An Interview With Daniel Blomquist, Creandum
I did an extensive interview with Daniel Blomquist from the Venture Capital firm Creandum. Daniel is an associate at Creandum and profiles innovative companies that have the potential to become market leaders in niche markets. He shares great insight on Nordic companies and gives some first hand tips on venture financing.
Many thanks to Daniel at this moment!
What’s the big idea behind Creandum, what's the philosphy so to speak?
Creandum was founded based on two important strategic principles. Firstly, from a market perspective, we identified a market opportunity due to the lack of professional venture capital investors in Nordic early-stage technology companies. We have seen through extensive analysis of the Nordic venture capital market that significant value has been created in companies that are less than 5-6 years old, which means that one has to invest early to be part of these successes. Secondly, from a resource perspective, we noticed that in many successful US early-stage venture capital firms, the investors often had entrepreneurial and technology backgrounds. This was rarely the case in Europe or the Nordic region. That’s why everyone at Creandum has an entrepreneurial background being involved in building and growing start-ups. Some have also worked as business angels before joining Creandum.
