Today Supercell, a tablet-first game startup, announced a giant fundraise that values it at $770 million.
In February it raised $130 million from three investors, Institutional Venture Partners (IVP),* Index Ventures and Atomico. Forbes, which announced the fundraise, says Supercell may be "the fastest growing game company ever."
Zynga has had a difficult time in the public markets, so it may seem surprising that investors are still writing game companies large checks.
One reason they are is because mobile gaming isn't dying, it's growing. People are spending more time playing games on their phones than browsing Facebook.
Another is because Supercell is generating $2.4 million per day. None of it comes from merchandise sales, which sustains other game companies like Rovio (Angry Birds) and MindCandy (Moshi Monsters). It's all coming from two hit games, Hay Day, which targets women, and Clash of Clans, which appeals to men.
Last year, Supercell generated $100 million. It has generated nearly $180 million in the first quarter of this year alone, and it could feesibly generate $1 billion by year end. 8.5 million people play its games.
Sandy Miller of IVP is now a board advisor of the Finland-based startup. His firm was an early investor in Zynga. He told us why Supercell won't be just another over-hyped startup.
"This one really takes the cake I think [in terms of growth], but the games area is an area where companies can grow quite rapidly," Miller explained. "Once we learned more about the company, we got more and more comfortable that they weren't a one-hit wonder. They have two games and the beauty is that the games are very different."
We asked him what Supercell can do to avoid becoming yet another mobile fad. Miller said being mobile only and tablet first is a big advantage. The company is also disciplined about testing and trashing games if it isn't confident they will be hits. He also said the company's name hints at another strength.
"The 'cell' in it refers to the strong teams they have," said Miller. "Most game companies talk about the people who work on the games as working in studios, like it's a big activity. A cell is meant to imply a small, really cohesive team. Most tech developments are done by small teams of amazing people, and Supercell has just that."
Currently, Supercell only makes iOS games. Instagram also earned success as an iOS-only company; it created an Android app just a few months before Facebook acquired it. Opening Supercell to the Android market will be an easy way for it to gain even more traction.
*IVP is an investor in Business Insider.
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