Gaming is an expensive vertical to win in, meaning those that do look like being potential winners don’t find it hard to attract larger amounts, with a $10 million seed round certainly being that (Note: This was a close with a further $7 million being added to an existing $3 million).
Rather timely, considering our post yesterday, Korea Investment Partners led the round, with Creandum, Index Ventures, Initial Capital, ProFounders Capital and Backed all participating.
Although gaming is a vertical that continues to be avoided by a particular type of investor, there are big returns to be had if you pick the right teams, and have a bit of luck of course. The Nordics is home to the best gaming talent in the world, so the odds are in our favour here at least, something that Index, who have seen Nordic gaming successes before with Supercell are aware of and something that all investors looking at the region should continue to consider.
As for Armada Interactive they have yet to release their first game, which is proof that it is only team that matters in this space. These larger early-stage investments in the Nordic gaming space happen around once or twice a year these days, leading us to believe that Armada Interactive have a bright future ahead of them if the quality of the execution can match the team.
This meets at the apex of two trends we’ve recently highlighted, 1) a Nordic deep tech renaissance and 2) the increased possibility of a quick flip and exit from Nordic deep tech companies for their talent.
Mistbase was only started in 2015 and although the price was undisclosed, DI Digital report that their valuation was 20MSEK when they raised 4MSEK last year, so it’s fair to say that the price was likely to be a fair few million dollars at least. Not bad for a company that’s less than two years old.
ARM are a perfect example of the potential buyers that exist out there for Nordic deep tech startups, an International giant on the look out for deep technical talent. There are lots more of those where they came from, and I fully expect quick acquisitions similar to this one to happen throughout 2017 in the region in the deep tech space.
Wave Ventures is a $1.2 million student-led fund run (and backed) by a lot of the people who’ve previously been heavily involved in Slush. Now, while letting students run an event is one thing (admittedly one of Europe’s biggest and best), giving them your money to invest is something else altogether.
This news can be read two ways. Either you take the view that pretty much anyone can raise a fund in Europe these days, or, you consider their expertise or potential to be just as good, or better as anyone else’s. My personal view is the latter.
A large part of being a good VC is access to dealflow, and as early-stage investors, with deep links to the student and Slush community, there are not going to be too many who know more about interesting new Finnish (and Nordic) companies than them.
Ultimately, the fact they are students is almost a moot point in terms of being a potential negative, as everyone in VC has started somewhere, and whether we like to accept it or not, being a VC, just like being a tech journalist (which is why we see so many go from TC to VC) requires a lot of superficial skills, such as network, access to deals and the ability to sell or brand ones self, something that age doesn’t necessarily present a barrier to.
It’s also worth pointing out that this is not that much of a strange phenomenon, with 10-20 student-led funds already operating in the U.S, perhaps another sign that the European VC market is maturing, with Wave Ventures simply being the first in Europe.