Some ownership changes afoot at Supercell, the mobile gaming giant out of Finland behind blockbuster titles like Clash of Clans and Hay Day. SoftBank has upped its stake in the startup to 73.2%, after buying an additional 22.7% of shares from existing external investors, with VC Accel exiting the company completely. SoftBank says that Supercell will continue to be run as an independent company, with existing CEO Ilkka Paananen staying on post-transaction.
SoftBank and existing investors are not disclosing the valuation of the shares, or of the company, but we are trying to find out. As context, In 2013, SoftBank bought into Supercell by teaming up with game developer GungHo (another Softbank portfolio company) to pay $1.53 billion for a 51% stake in the company.
That transaction took a large chunk of money off the table for both existing investors and employees, in contrast to this latest share purchase which is specified as solely from other external investors. In addition to Accel, other investors include, Index, Atomico, and IVP, and it’s not clear which of these have also sold shares as part of the deal.
While SoftBank says it will be giving the company a long least operationally, it also sees the investment as core to its wider mobile strategy.
“Supercell is expected to continue to be a leader in the mobile games industry,” SoftBank notes. “SoftBank positions its partnership with Supercell as core to its mobile content strategy and believes that strengthening its relationship with Supercell through the transaction will further contribute to the SoftBank Group’s growth over the long-term.” SoftBank says the transaction closed on May 29.
Supercell last raised outside funding in 2013, a $130 million round from Atomico, Index and Institutional Venture Partners. The company builds its games around a “freemium” model, where it is free to download a game, and then users buy extras within the games themselves.
The combination of that model and the generally engrossing nature of the games resulted in a jackpot for the company. At that time of that Series B round in 2013, Supercell was making $2.4 million per day on 8.5 million daily active users.
We’re trying to see if we can dig up some more recent metrics. It’s not clear why Accel decided to cash out altogether; we’re trying to find out a reason for that, too.
It’s not an overstatement to say that Supercell has been one of the most successful mobile gaming startups of all time, with Clash of Clans, Hay Day and Boom Beach all among some of the highest-grossing games globally. App Annie says that as of June 1, 2015, the three have been ranked as number-one among the highest grossing games for iPad respectively in 149, 128 and 112 countries.
But as we have seen with the likes of Zynga, King.com, and Angry Birds maker Rovio being number one in gaming is not always a position that can be held indefinitely, as consumers’ tastes change and they move on to the next big thing. What Supercell has been very clever about is managing growth on a relatively small pool of content, and tying usage very closely to revenue generation, so it will be interesting to see if and how it will prove to be more sustainable than some of its rivals.
The moves come amid bigger management changes at SoftBank. Nikesh Arora was appointed president at SoftBank last month, with the ex-Google, ex-T-Mobile executive previously having been head of its internet and media division. There he made several very aggressive moves to invest in several startups in India and further afield, bolstered by proceeds from SoftBank’s Alibaba stake. This move to solidify SoftBank’s Supercell holdings could point to how Arora plans to continue business as usual at the company under his watch.
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