VC-backed Supercell secures $1.53bn from SoftBank

The substantial capital injection, which values Supercell at $3bn, sees SoftBank and GungHo obtain a 51% stake in the company. The businesses made the strategic investment in Supercell through the creation of a special purpose company in Finland called Buyer SPC. SoftBank provided $1.2bn for 80% of the acquired stake, while GungHo supplied the balance.

Supercell will remain an independent company following the capital injection, but will also become a subsidiary of SoftBank.

None of Supercell's venture capital backers are fully exiting the company as part of the transaction with SoftBank and GungHo. All of the company's current shareholders are selling 51% of their holdings in Supercell to the SoftBank/GungHo consortium and retaining the balance.

The company is backed by Index Ventures, Initial Capital, Atomico Ventures, London Venture Partners, Lifeline Ventures, Institutional Venture Partners and Accel Partners. Alongside the aforementioned venture capital firms – excluding London Venture Partners and Lifeline Ventures – Supercell's major shareholders comprise members of Supercell's management team – creative director Mikko Kodisoja, CEO Ilkka Paananen, product lead Lassi Leppinen, lead programmer Visa Forsten and server architect Niko Derome – as well as investment company Cerval Investments.

Prior to the investment by SoftBank and GungHo, the aforementioned major backers of Supercell held 84% of the company. The remaining shares are believed to be held by London Venture Partners, Lifeline Ventures and 18 individuals including Supercell employees and private investor Klaas Kersting, the founder and CEO of flaregames.

Initial describes its own returns figure from the partial sale as a "very healthy one, given how early we invested and the exponential nature of three consecutive up-rounds". Initial's Ken Lamb explains that SoftBank and GungHo's purchase price is a multiple of Supercell's most recent funding round, which totalled $130m, and that the company's three funding round values were determined as a multiple of the preceding round's value.

Previous funding
Supercell most recently raised $130m in its series-C round from Institutional Venture Partners, Atomico and Index in April this year. The transaction valued the company at $770m.

Index is believed to have invested via its €500m Index Ventures Growth II and €350m Index Ventures IV funds, while Atomico invested via its Atomico III fund, which closed on approximately $300m in December last year. Institutional Venture Partners used three of its funds to back the company: the $600m IVP XII, the $750m IVP XIII and the $1bn IVP XIV, all of which hold equal shares in the firm's stake in Supercell.

Prior to Supercell's series-C, Accel Partners led a $12m round for the company alongside London Venture Partners in May 2011. Initial led the company's series-A in February 2011, investing early-stage capital into the start-up alongside Lifeline Ventures and London Venture Partners.

Company
Founded in 2010, Supercell is headquartered in Helsinki and employs 100 staff. The company recorded turnover of $100m in 2012, as well as turnover of $179m in the first quarter of 2013 alone. The company is reported to generate around $2.4m per day.

Supercell develops freemium games for tablets. The company has developed farming simulation game Hay Day and combat strategy game Clash of the Clans, both of which are available on iOS. Clash of the Clans and Hay Day currently rank as the second and third top grossing iPad apps ever, respectively.

People
Ilkka Paananen is the founder and CEO of Supercell. Following the capital injection by SoftBank and GungHo, Supercell's board of directors will comprise SoftBank chairman and CEO Masayoshi Son; SoftBank financing and investment planning group manager Katsumasa Niki; GungHo chairman Taizo Son; Supercell CEO Paananen; and Supercell creative director Mikko Kodisoja.

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• Topics
• Exits
• Consumer
• Nordics
• Partial sale
• Finland
• Index Ventures
• Accel Ventures