Rovio's Unlikely Journey to their IPO
Congratulations to the Rovio team on this week’s milestone!
It’s just one more step, and the hard work continues, but it's an important milestone in Rovio’s unique journey.
We’re deeply appreciative of the Rovio team’s hard work through the years. Thank you in particular to the original founding group, Kaj, Niklas and Mikael Hed, and Peter Vesterbacka, the well-known Rovio brand builder, and our CEO Kati Levoranta leading the team forward today.
In the run-up to today, we’ve been reflecting on the unique qualities of this team and the determination which propelled them to this milestone.
An “Overnight Success” 7 Years in the Making
Rovio was perceived as an “overnight success” when Angry Birds emerged in 2009. But in reality, it took Rovio 51 game attempts (51 tries & misses) over 7 years before they created the game that changed it all for them. In fact, in 2009, the company was running out of cash and had to make the tough call to reduce the team from ~50 to 12 employees to actually have enough runway to ship the 52nd game, Angry Birds.
That Red Bird changed everything for Rovio. It quickly became one of the first global hits of the ‘open mobile’ era, which freed the mobile apps industry from the control of the mobile carriers. Angry Birds rode the rising tide of more powerful smartphone platforms, and the distribution power of of app stores platforms from iPhone & Android.
But while the first AB game rocketed to the top of app store charts, the hard work and growing pains of scaling the team and the business was only just beginning.
Challenges & Persistence in Scaling
As all founders know, scaling a company from 12 to hundreds of employees, while launching multiple new projects, can challenge anyone. It meant stretching to rapidly build new ‘beyond-gaming’ businesses. All while recruiting the next-generation of creatives and devs to make the company even stronger.
So of course, there were debates to find the balance between fast growth and profitable growth. And many creative battles. Do you stick to gaming only? Or branch out to other entertainment media? These were tough debates with no single correct answer.
Ultimately, in my view, the team found the right balance of pushing into new creative forms and businesses by successfully expanding to video, motion pictures, and brand licensing, but with mobile gaming at its core.
Rovio successfully produced their own feature-length movie that, in itself, delivered a $350 million box office with sequels on the way. Rovio’s mobile games have become a global franchise and have been downloaded almost 3.7+ BILLION times so far. Thanks to this multi-faceted approach, Rovio has grown into a multi-hundred million dollar business and operated profitably for three of the last four years.
Global from the Start
It’s worth noting that Rovio had a non-obvious natural advantage. Finland, of course, is a relatively small country with only 5 million people. Given the small local market, the company couldn't focus on Finland alone. The Rovio team understood that in order to be successful, they had to 'go global' from the start and create a gaming experience that would transcend cultural boundaries and appeal to a global audience.
In our view, this has become a positive pattern across multiple tech startups. For context, roughly 20 years ago, the VC and the tech industry began to look beyond the narrow definition of Silicon Valley in a geographic sense. At Accel, we often say that Silicon Valley is best represented as a mindset towards innovation, rather than a physical place. I often think being based in Espoo, Finland worked in Rovio’s favor because the company was removed from the groupthink that sometimes happens in Silicon Valley.
This week's listing in Helsinki underscores a bigger trend that Rovio has helped pave: the opening of local IPO markets outside of the U.S. This is an encouraging win-win for the ecosystem.
As a last thought, if you spend enough time in the region, there is a well-known Finnish phrase, “sisu” that many say represents a key element of Finnish character of toughness and perseverance.
From our vantage point, I think this concept of captures the essence of the Rovio team’s spirit and how they’ve faced and overcome the challenges in their way, and into the future.
And in reality, this toughness and perseverance is what's required for all startups, each with their own challenges and obstacles, to make progress.
Along with our co-investors at Atomico and Felicis, we have been honored to be partners with the Rovio team. Thank you again for letting us be part of it.
-- Posted on behalf of the entire Accel team
(With Peter Vesterbacka & Mikael Hed)