Softbank increases stake in Supercell by 73%. The investors are the sole external shareholder in Supercell. Supercell is based in Helsinki, Finland and has operations center in San Francisco, US. The company was formed by industry veterans in games. They have developed 165+ games across 12 platforms.
Supercell is the mobile gaming giant out of Finland has some of the gaming titles Clash of Clans and Hay Day. The stake acquisition was done in stages. Softbank acquired a stake in Supercell by teaming up with game developer GungHo(another Softbank portfolio company) by paying $1.53 billion for 51% stake in the company. Supercell was valued at just over $3 billion.
Supercell had raised 3 rounds of funding. They received undisclosed amount as seed capital from Initial Capital and London Venture Partners in 2010. The company secured venture capital of $12 million from group of investors including existing investors and Lifeline Ventures, Cerval Investments, Accel Partners and Klass Kersting in 2011. Supercell received funding of $130 million as Series ‘B’ funding from Index Ventures contributing $52.5 million in this funding. Atomico and Institutional Venture Partners (IVP).
With this deal Softbank has bought entire stakes of existing investors. With the early funding Supercell had built games around a freemium model, the model where it is free to download a game. However the user has to buy extras within the games themselves.
Supercell has managed growth on a small pool of content and tied usage very closely to revenue generation. Many gaming companies like Zynga, King.com and Rovio are vying for the top slot in the gaming segment. Consumers tastes keep varying and keep moving from one gaming to another.
Supercell will remain independently managed by Softbank and the company plans to be a leader in the games industry. For Softbank this moves come amid bigger management changes. Nikesh Arora was appointed as President of Softbank. He has made several aggressive moves to invest millions of dollars in several startups in India as well as other places.