Finnish mobile games developer Rovio, the company behind the hit Angry Birds
raised $42m in a funding round led by Accel Partners and Atomico Ventures. Accel's other investments have included stakes in Groupon, Facebook and AdMob. Atomico Ventures is the investment firm launched by Skype co-founder Niklas Zennstrom, who will take a seat on Rovio's board as part of the deal.
Rovio will use the investment to fuel its expansion plans to go beyond mobile games to become a fully-fledged entertainment and media company. In Q4 2010, Rovio branched out from mobile into physical goods with the launch of a range of soft toys. It plans to further exploit its IP, with TV and film projects reportedly in the works.
With 75m total downloads since launch, IHS Screen Digest estimates that the Angry Birds franchise has generated at least $50m (including revenues from licensing deals, toy sales, advertising, in-app purchases and paid downloads). Rovio has reported that Angry Birds only cost €100,000 ($140,000) to develop.
Rovio's achievement with Angry Birds is no overnight success story. Founded in 2003, the Finnish developer released 51 titles with little success before its 52nd, Angry Birds, took off. Even on the App Store, Angry Birds was not an immediate success; Rovio's strategy was to gradually build up the games' following in smaller Nordic markets (where a few hundred downloads per day could get it to the top of the charts) before getting featured by Apple and hitting the top of the charts in the lucrative US and UK markets.
Rovio may have already accumulated a significant amount of cash, but the extra funds and expertise the deal provides will help it on its mission to create its own media and entertainment empire; it has described its goal as to become "Disney 2.0". Angry Birds, despite its various iterations, is essentially a single game; to achieve its ambitious goal, Rovio will need to invest in new IP, the success of which in the hits driven business of mobile games will be hard to predict.
Many games have found success on mobile, most notably Tetris which has seen more than 100m paid downloads. But Angry Birds is unique among the top tier of mobile games in that it originated on mobile, rather than being ported from another platform. As such, there is little precedent for companies creating sustainable cross platform brands from successful mobile titles.
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