‘Angry Birds’ Maker May Hold IPO in 2012, Mighty Eagle Says
Rovio Entertainment Oy, the Finnish creator of “Angry Birds” mobile-phone games, may sell shares to the public as early as next year and is probably worth more than $1 billion, its chief marketing officer said.
“We’re not ready to file for an IPO tomorrow,” Peter Vesterbacka, who also goes by the title Mighty Eagle, said in an interview with Bloomberg Television. “Maybe a year from now.”
The touchscreen game, in which players use a virtual slingshot to fling birds at structures populated by green pigs, has had 400 million free and paid downloads since 2009, with three fourths of those in the last six months. Rovio is hiring in the U.S. and China to develop activities such as retail and movies, and is worth more than $1 billion, based on funding talks, people with knowledge of the discussions said in August.
“We’re happy with our valuation but we think it’s probably a bit north of that,” said Vesterbacka. Espoo-based Rovio, which announced in June it took over Finnish animation studio Kombo, is weighing more acquisitions, he said.
Vesterbacka, 43, previously spent 14 years at Hewlett- Packard Co. selling systems to phone companies and encouraging mobile developers. He discovered the team that would become Rovio in an HP-sponsored games contest in 2003.
The Angry Birds brand also makes cash via advertising, in- game purchases and physical merchandise including T-shirts, Halloween costumes, stuffed toys and a cookbook. Rovio has benefitted from publicity, including a mention by Russian President Dmitri Medvedev, who praised Vesterbacka and Angry Birds this year “for creating an occupation for a huge number of officials who now know what to do with their leisure time.”
Merchandise is 10 to 20 percent of the business, and stuffed toys, priced $8.99 to $69.99 on the company’s website, are selling a million units a month, Vesterbacka said.
“We’re insanely profitable,” he said. “We are very, very profitable. We’re not a publicly traded company yet but we can fund our own growth.”
Vesterbacka worked on other startups after leaving HP in 2006, and joined Rovio in early 2010. The company has gone from a dozen people to about 200 since then. Now the Finn, often clad in a red hoodie, represents the company at events around the world, while Chief Executive Officer Mikael Hed runs the show in Espoo.
Hires this year include David Maisel, former chairman of Marvel Studios, which produced the “Iron Man” films, to be special adviser and executive producer of Angry Birds movies. The company also recruited former Tele2 CEO Harri Koponen, who hired Vesterbacka at HP, to head merchandise including books.
Rovio experienced its first high-profile departure with the exit of Wibe Wagemans, senior vice president of brand advertising, who was working on alliances with Starbucks and other retail brands.
Tie-ups with other companies include a deal with Finnair Oyj, which offered fans seats to play “Angry Birds” in the air in a promotional flight to Singapore last month, and bookseller Barnes & Noble Inc., which offers free access to the 99-cent “Mighty Eagle” feature to users of its Nook tablet device while they’re in its stores.
“We think we have a good shot at being the first entertainment brand that has a billion fans -- people we can talk to and have a dialog with every day,” said Vesterbacka. The company now has about 150 million “active users,” he said.
The company published 51 games for Nokia Oyj (NOK1V) phones and other handsets before releasing “Angry Birds,” which has had multiple runs at the top of the charts at online application stores in many countries, including Apple Inc.’s online app store in the U.S.
“Before the iPhone and the app stores, if you weren’t friends with the handset makers, even if you made a great game you couldn’t get it out there,” Vesterbacka said. “There were all these people on gateways controlling what went out. The app store model has changed the dynamics.”
“Angry Birds” zoomed to the top of the iPhone charts last year before being rolled out for Android phones, desktop computers, and Barnes & Noble’s Nook e-reader. It’s on Nokia’s current smartphones and on Windows Phone 7, and Rovio has been working on a social-media version for Facebook.
Footsteps of Disney
In March, Rovio received $42 million in funding from investors including Skype Technologies SA co-founder Niklas Zennstrom’s Atomico as well as Facebook backer Accel Partners. It’s “very possible” that Rovio will seek another venture- capital round before eventually holding an initial public offering, possibly in two to three years, CEO Hed said in June.
“We’re still building a lot of our infrastructure, our company, our platform, everything,” Vesterbacka said. “There’s a lot of good discipline in having to be ready to go public.”
The company is working on a 20-year plan for Angry Birds, Vesterbacka said. The rapidly changing nature of media distribution means Angry Birds movies could even go “direct to app,” he said.
“Disney started as a black and white cartoon about this little mouse,” he said. “Nintendo has been working on Mario for 26 years. Angry Birds is less than two years old.”