Editor's note: this is a sponsored post by UK Trade and Investment
Whenever somebody asks me why Nordic/Baltic startups are performing so well, one of the main arguments tends to be the fact that they simply have no other choice. Coming from relatively small home markets, they simply have got to think global from day one. If you are in Finland for instance, you can probably conquer your home niche market in a matter of months if not weeks. This, forces companies to think about expansion early on and hence global success too.
iZettle, the chip card reader that allows anyone to take credit card payments on their smartphone, announces it is launching a test run in the UK. Three thousand mini-chip card readers are being made available for small businesses and individuals who are willing to participate in the beta trial.
We covered iZettle's payment fees recently, as the company just dropped the €0.15 transaction charge, leaving just a 2.75% fee for MasterCard, Visa, or Diners Club. American Express comes with a 2.95% fee. Missing from the UK launch is Visa credit card acceptance.
Just-Eat announced they have acquired FillMyBelly, UK's third largest player in the online food delivery market. The Danish company has been growing like crazy in recent months, making this acquisition their ninth since the end of 2011. FillMyBelly has 1,400 restaurant partners across the UK. According to Just-Eat, this makes them the largest player in the online delivery market, likely making them the go-to service for food delivery.
Wrapp has now launched in the UK, allowing users to send and receive gift cards, download the Wrapp app, as well as send gift cards to users in the UK and Sweden. The app has seen a fairly decent amount of traction in Sweden, becoming visible to 1/3 of all Swedish Facebook users during their beta trail. The company has also received over $10 million in two investments from respected investors such as Atomico, Greylock Partners, and Creandum. From here, Wrapp tells us they are beefing up to target the U.S. market.
Flattr, the microtipping service from Sweden, has announced it has closed a 14 million Swedish kronor (€1,6 million) investment from Federico Pirzio-Biroli and Passion Capital. The investment values the company now at 88 million Swedish kronor (€10 million). The service allows content owners to attach (and thus accept) micro donations through a simple Flattr -button on their website. A user can tip as many services online during a single month and the amount the user has allocated to be paid out will be evenly distributed all those who received clicks by that user.
According to the company, the investment was closed actually towards the end of last year, but they were only able to announce it today as the proper paperwork was in place.
RentMama is focused on helping you find the right car for your convenience. While assisting users with car rentals, RentMama looks for big and small rental companies who have your specified car available. And it isn't limited to cars in just one region-- the big idea is to save travelers the few extra hours they spend searching for best deals on Google to find the best car rental deals during their visit. RentMama achieves this by bringing all car rental companies under one banner. Users benefit by having to visit one place to find the best deals.
Sweden based TrueCaller has progressed steadily after the service launched back in 2009, moving from 7,500 users in August to 27,000 by the end of January 2010. I guess it was only a matter of time from there on the progress has been substantial. The caller identification app that enables users to easily search people via names or numbers.
Netcycler is the Finland based startup that developed an online service to help people recycle their goods. In the most basic form, it helps to do this with two people who find something else they're willing to exchange their own good for. This also works on a larger scale, where you may be giving someone else your good and receiving a good from a third person. Last week, the company announced they're opening shop in UK.
Music Ally recently revealed financial report from Spotify Ltd in UK, which showed £16.66 million loss for 2009. When looking at the financial report for Spotify AB in Sweden the picture is quite different. While in UK Spotify's expenses exceeded their sales by more than £16 million, Swedish branch showed an income of 1,5M€ and a profit margin of 15,5%. Net sales for Spotify in Sweden were almost 10M€, which is almost as much as the sales numbers reported by Spotify in UK. The data for Spotify in Sweden did not include detailed break down of numbers for its subscription fees vs. add sales but the UK numbers suggest Spotify makes slightly more money from subscriptions.
Back in October we wrote about the negotiations Sulake was having with its employees about reducing the work force. The plan back then was to reduce the workforce by 20%, which would have meant something along the lines of 40 people. They ended up sacking 28 people, to cut costs, and thus stayed well below the initial plan of 20%. Juhani Lassila, their Communication Exec stated in the Finnish M&M article that the current restructuring and cuts have dramatically improved their profitability.
While 28 people were fired, I've heard from close sources that others have left the company of their own will and the environment isn't all that lively inside the company. This of course is completely natural when a startup that has grown to a multinational gaming house has its first real employee negotiations and ends up cutting its workforce by this much.
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.
Blyk, the free Finnish born (but operates only in UK) mobile network for 16 to 24 year-olds funded by advertising, has signed a frame agreement with Aito Technologies, a Customer Experience Management (CEM) solution provider, for the delivery and implementation of its Business-Driven CEM software product, Aito, to UK market. This follows a successful 3-month pilot installation, which began in May.
Aito takes business intelligence from network traffic data and offers Blyk an easy-to-understand, in-depth analysis of service usage, member behavior patterns and trends.
The information that the software generates is given to key staff directly involved in business management – sales and marketing managers, member service teams, product managers – in a form which is easy to use and act on.
In essence, Aito is an easy-to-implement tool that’s a user-friendly method of making sure mobile subscribers are having a great network experience, at all times, whether making a voice call, sending a text or MMS, or, in the case of Blyk, receiving relevant mobile adverts with their services. The carrier-grade Aito will provide Blyk with a 360° view of the activities and overall experience of its entire subscriber base. .
CEO of Aito Technologies, Anssi Tauriainen, said, “Like Blyk, we know that mobile advertising is set to be one of the most important business models and revenue-generating network activities offered by operators in the future [...]"
Mobile advertising has been already coming from years and is still as annoying as ever. Yet, this is hardly Aito's fault and I admit not having tried Blyk services. That said, even if Blyk works like charm, I already pay fixed monthly sum for practically unlimited calls, SMS and data and can't really imagine the future any other way. For cash-strapped 16 to 24 year-olds teens who adore brands there seems to be something there though. Blyk users receive 6 sms/mms from the chosen brands per day in exchange for 217 txts and 43 minutes of voice calls each month.
For the segment the service seems to be working: Blyk has currently 200,000 member in the UK, which is the only market they are currently serving. Now Blyk is ready to slice and dice the market data into an easy-to-use format with Aito Technologies' help and are well equipped to follow their plans to go pan-European in 2009 potentially reaching 40 million young consumers.
The advertisers seems to be happy as well: Big brands like L'Oreal have seen tremendous results with average click through rates of 29% (ranges between 12 and 43%). Quite a lead from the average mobile advertising average CTR that hovers around 3-6%.
Finnish media Digitoday knows that in addition to Blyk, Aito Technologies has currently six commercial pilots running in Europe, including Finland. Digitoday also reports that Aito has around 700 potential customers, traditional and virtual mobile operators. Along with these, Aito is going after ring tone, community and added value service providers in the mobile space, which there are around 2000 to 3000.
According to TechCrunch UK (blog post here) Muxlim, the Finnish born Muslim social network, is launching a virtual world especially Muslims in mind. This will be much like the other virtual worlds we are familiar with such as The Second Life apart from the Muslim specific features.
TechCrunch UK reports:
The idea is that something tailored to the Muslim world would be allowed through the IP-blocks of countries like United Arab Emirates which currently stops access to virtual worlds and online games considered unsuitable or offensive to Muslim culture. The virtual world is said to launch in 4-6 weeks
The revenue model will be VIP accounts, virtual gifts, virtual furniture/clothes, themes/styles, profile applications, advertising, branded communities and physical merchandise like t-shirts.
Muxlim has been very active lately. In addition to the new virtual world, they are planning to open an office in the UK and a big UK launch event at the end of January 2009 to go along with that.
If you look at the TechCrunch UK comments it clearly shows that religion is much more sensitive topic in the UK than it is over here in the Nordics and Baltics. Very few, if any, of the comments actually deal with the product itself, but rather with the fact that the virtual world is for Muslims. Mike Butcher, the Editor of TechCruch UK, decided to shut down the comments since the blog post created so many racist comments. I have not seen such negative approach here in the Nordics or Baltics even though Muxlim has been in the headlines quite a bit. It seems that UK has much more to learn from us than just financial regulation.
Edit: Here's also Wired's take on the Muxlim virtual world.
This time we feature a bit longer story as Markus Råmark from Mobile Advertising Solution (MAS) provides us more insight into how they see mobile marketing evolving and what they are trying to achieve. (Full disclosure: the author's employer has a business relationship with MAS.)
MAS launched their 123play portal a while ago in the UK, and aims to open new countries in Europe still during this year. The company plans to have the service available globally by the end of 2010. MAS is currently owned by the operative management and private investors, and is now executing a new financing round and checking for potential new investors, including also VCs.
1. Could you tell us a bit about why you founded MAS and got into the ad-funded mobile games market?
The combination of advertising and gaming on mobile is something which I have always thought would happen, ever since the birth of the whole industry around mobile content and services back in the late 90's. Advergames, in-game advertising and ad funded gaming are interesting business models and they work well if utilized correctly. My main reason for creating MAS when I did was that it was the perfect time; all the necessary enablers were in place to establish this type of company. The mobile games industry at large is in need of new revenue streams and new effective distribution channels, and advertisers are also looking for new effective channels to reach their target groups. What this means is that there is a clear opportunity to combine these two needs, whereas until now content and advertising would have always competed for the consumers attention. We already know that millions of people regularly play mobile games; equally, the advertising industry is worth nearly half a trillion dollars a year; combining the two is an obvious thing to do.
2. How do you position 123play against and differentiate from the other ad-funded portals?
We are focusing quality, not quantity; we don't believe that offering hundreds of poor quality games is the right approach. All the games that we distribute need to be top quality and have a high re-play value, otherwise there is no value to our advertisers. This is what makes our ad funded model successful; the more consumers play our games, the more ad impressions they generate. We have strict content guidelines which means we don't allow adult material, bad language, and violence in our games or advertisements. This means that both big advertisers and game publishers can feel safe about distributing their ads and games in our channel, as there is no chance of their brands being misrepresented or damaged.
3. Regarding partnerts and clients, who's looking to advertise in mobile games right now?
The ad spend on mobile at present comes from both big global brands and also pure play mobile content. However, the ad funded gaming model is still in its infancy and is being seen as an increasingly popular channel for clients to increase brand awareness and drive consumer call to action. We are running campaigns for clients as diverse as Britvic, eBay, The Sun and NME - it's accepted that within a few years that mobile will leapfrog online as the most immediate way to reach an audience. I think that as we reach the end of 2008 we will see this channel as a key part of any company/brand mobile strategy.
Obviously, for publishers the operator is still the main focus, but whereas they may get featured on the games portal for a few weeks at best, we can get their games seen by consumers over a much longer period of time.
4. How does one make mobile advertising work?
One of the key things to make ad-funded content a success is relevance; you need to be able to serve people ads that reflect their interest. That's made even worse if the way the advert is delivered in a poor experience or feels 'cheap'. Some of the early attempts of ad funded mobile games have been poor quality, so that's something we are making sure we avoid. We have found the "click to browse" type of ads work well where you can drive more traffic to your mobile site; what's important is making sure the kinds of adverts you offer are ones that match the profile of the average mobile gamer - so things that focus on lifestyle and having fun. When we have tested these kinds of adverts, the click through rates have been very good, so that's certainly something we will offer. Games are also a good vehicle for creating brand awareness, due to the amount of time and attention you can capture.
5. How much revenue can one make via ad-funded model?
The revenue potential depends on CPM price and the amount of game plays a certain game generates. We share the NET revenue with game publishers. At MAS, we are targeting the casual-gamer first and foremost, and so far this seems to be working well. One game can easily generate the same amount of income for a publisher as the pay per download model can, if the game is good quality and the re-play value is high. This combination of short, sharp portal downloads and slow and steady ad-funded is the way for publishers to get as much value as possible from the content they create.
I remember talking to Marko in Paris at LeWeb3 last year and he said their target for this year is to reach 100k customers by the end of the year. Seems like they did a lot faster, some proof of the concept working even better than believed.