Socialgamesobserver

The Latest News on the Social Games Market in Europe and Emerging Markets

4Jun/13

HitFox Backed AppLift Raises $13 Million from Prime Ventures

By Camilla Noon

AppLift Expands Leading Position in Mobile Games Marketing & Monetization

The mobile games marketing platform AppLift raises $13 million (€10M) from venture capital and growth equity firm Prime Ventures in series A funding round. AppLift will use the funds to further invest in its marketing and monetization platform and accelerates the global expansion with new offices and key personnel. One year after launch, AppLift is partnering with more than 80 mobile game publishers such as King, Wooga and Kabam and 500+ media partners like RTL and Closer. As a result AppLift delivers up to 1M high-quality installs per month for top mobile game publishers. Within 2013 AppLift plans to hire 50 additional engineers, product specialists and business development professionals.

Founded by HitFox Group, Kaya Taner and Tim Koschella AppLift has quickly made a name for itself by delivering quality game players at scale. Media partners benefit from the opportunity to monetize in a non-intrusive and user-friendly way and receive eCPMs of up to $75. Headquartered in Berlin, AppLift has additional offices in San Francisco, Seoul and Paris. HitFox was already active in the space of user acquisition with the portfolio company ad2games at the time when AppLift launched. The previously established game publisher relations and technology leveraged AppLift’s fast start.

Serial entrepreneur and HitFox Group CEO Jan Beckers says, ”The strong market position of AppLift is based on a world-class team, cutting-edge technology, a sustainable approach to partner relationships and an unwavering focus on flawless execution. With the new funding AppLift has everything required to become one of Berlin’s biggest success stories.”

Kaya Taner, Co-Founder and CEO at AppLift adds, “Prime Ventures’ entrepreneurial mindset is a perfect fit for us. We met them, got along immediately and agreed on a deal within five weeks. HitFox Group gave AppLift a great initial push into the market. Now Prime is the perfect addition to expand and strengthen our position internationally.”

Prime Ventures Partner Roel de Hoop comments, “AppLift’s team, technology platform and the synergies created through the HitFox Group and its portfolio companies quickly brought them ahead in the market. The closer we looked at AppLift, the more impressed we were. We saw the opportunity to invest in a leader within the fast-growing $10 billion mobile games market.”

Shane Horneij, Director of Performance Marketing at King states, “It’s great to see that AppLift has secured $13 million in this round of funding. They have been a great partner in driving large volumes of installs across Android and iOS while maintaining high quality users. We look forward to launching more titles with their team in the future.”

15Feb/12

Guest Post: How to Benefit from Facebook’s IPO

By Sebastian Sujka

[Editor's note: Berlin-based serial entrepreneur Jan Beckers has founded five successful companies before starting his current venture, game distribution holding HitFox. Most recently, he has been co-founder and managing director of SponsorPay – a monetization platform for online, social and mobile games. Prior to that, Jan co-founded mobile marketing platform Madvertise and job platform Absolventa. During his studies at University of Münster he founded Studenta and Private Productions before graduating with a Master of Business Administration.
Jan has invested in Internet Start-ups such as Brands4Friends, Lieferheld or Gruenspar and is a pre-IPO investor in Facebook and LinkedIn since his secondary investments mid of 2010. In this guest post, Jan shares his insights on Facebook’s IPO from an investor's perspective.]

What happens when Facebook finally goes public

Here’s what I expect to happen in the short term (I have also blogged about this on German startup magazine Gründerszene).
Besides all the usual investors there are 800+ million (happy) users of Facebook that are following the IPO in the media. A fair amount of them will buy Facebook Shares to be part of the growth story – despite being unsophisticated in investment matters. This means they`ll literally buy at almost any price – they are not really aware that valuations matter.
Other investors will buy for tactical reasons: They buy to become part of the initial stock price gains. Therefor it is very likely that the stock price will go up 20-100% within the first minutes, hours or days. This could mean valuations between $100-200 billion.

After all initial buyers got their stock; the tactical buyers start to sell. Then the stock price will lose a part of its gains. But in the long-term the price/valuation of Facebook will likely go up again – justified by the good long-term business prospects for Facebook.

Facebook’s valuation could exceed $300 billion in the mid-to-long term

A valuation of $80-100 billion is fair at the moment. Here are the reasons:
Facebook will likely have about 1.5 billion users in a few years and they will use data and user relations to expand to further business fields – e.g. search.

Google is generating about $20 per user and year. If Facebook manages to do the same while maintaining its growth rate, this would mean that with 1.5 billion users, each of them generating $20 in yearly revenue, Facebook can see $30 billion revenue per year. Long-term margins with Facebook’s business model should be 40% or even higher – that’s $ 12 billion in potential annual profit.

If you now assume a typical growth price/earnings ratio of 25, you come to a valuation of 300 billion dollar. Now discounting these future expectations for the implicit risks and interests a valuation of $80-100 billion seems legitimate. The long-term value of Facebook could be even much more than $300 billion if you assume both user base and more significantly revenue/user are continuing to grow.

Strategies for profit

As an investor I see three strategies to profit from this IPO:

#1 Try to get Facebook stock before or during the emission. Wait for the quick gains. Sell before you expect the peak (e.g. at 30-50% gain).

#2 Buy (cheaper) stocks of comparable companies now, e.g. Google and other related internet stocks that people will compare against Facebook’s valuation. When Facebook’s valuation is increasing, their valuation will increase as well.

#3 It’s possible that in the mid-to long term (five or more years) Facebook has the potential to become a $1000 billion business. Long-term investors can buy now at prices close to $100 billion and still hope for a 10x profit.

Personally, I will try to profit from the initial gains and then sell my (Pre-IPO) Facebook shares after the IPO on the private market (to avoid the 6 month lock-up period of pre-IPO shares).
If you can get your hands on Facebook shares now, I’d recommend buying. Prices won’t be lower after the emission.

A nice side effect of the Facebook IPO on the valuation of social games companies: Valuations should go up, since there are always interdependencies between the valuation of related companies. You could already watch the effect when Zynga’s stock price increased by 10% after the announcement of the Facebook IPO.

7Feb/12

Game Marketer HitFox Acquires Advertising Network ad2games from Gameforge

By Regina Leuwer

German game marketer HitFox today announced the acquisition of Chili Entertainment to add game advertising network ad2games to HitFox’ portfolio.

In 2011, ad2games generated around 75 million clicks for online game publishers such as Bigpoint, gamigo, Gameforge, InnoGames, or Upjers. The ad network was previously majority-owned by online game publisher Gameforge. Terms of the deal were not disclosed; according to our sources HitFox paid a “seven digit” euro figure.

Often referred to as ‘Groupon for gamers’, HitFox offers time-limited deals with steep discounts on games, hardware or virtual goods.  The company also expanded into the field of performance marketing. This latest acquisition adds the capability of a specialized games advertising network. HitFox aims to become a major game distribution, marketing and user acquisition channel for game publishers and manufacturers.

HitFox was founded in August 2011 by Jan Beckers, Tim Koschella, Ruben Haas and Team Europe.  Investors include Holtzbrinck Ventures, Hasso Plattner Ventures, and Digital Pioneers by Bigpoint’s Heiko Hubertz.

The company currently employs 30 in its Berlin headquarters and another office in San Francisco.

12Aug/11

Jan Beckers, Tim Koschella and Team Europe Launch HitFox

By Sebastian Sujka

Just before the gamescom 2011 HitFox announces its launch in Germany. HitFox, a company founded by Jan Beckers, Tim Koschella and Team Europe, specializes in user acquisition for game publishers around the world. HitFox users can find exclusive deals for selected games and hardware at www.hitfox.de. Publishers can benefit in two different aspects: On one hand, no fix costs for the acquisition of new customers, on the other, they will receive a target group of passionate gamers with high willingness to pay.  Additional services are in the pipeline. The Start-Up raised a mid 7-figure Euro investment from Holtzbrinck Ventures, Hasso Plattner Ventures, Tengelmann Group and Kite Ventures. HitFox’s value proposition is simple: gamers receive current deals on online and offline games, hardware and accessories via e-mail. For Example: A discount of 75% on virtual goods in a popular online game, or 40% off on a coveted game console. In turn, publishers acquire new customers and devoted gamers, and HitFox will partake in generated revenues.

As Lars Langusch, general partner at HV Holtzbrinck Ventures and board member at wooga puts it, “Professional user generation for game publishers is getting more important. This applies particularly to the booming social and browser-based game market as well as for console games. HitFox will help publishers with this and can provide the industry, as well as gamers, a truly value-adding service.” Jan Beckers, serial entrepreneur and managing director of HitFox, highlights the high ambitions of the young start-up: “HitFox’s goal is to become a worldwide market leader in game marketing as a long-term and success-oriented partner of publishers. We want to make sure that 100 million plus gamers around the world will get in touch with the most interesting games and accessories. A prerequisite to be successful is to recruit and develop the best employees in product, IT, online marketing and publisher relations.” In conjunction with this goal, HitFox has already recruited over 25 employees for its headquarters in Berlin, Germany. The start-up plans to quickly expand internationally and tap into further markets in Europe and North America in the following weeks. With the support of investors and strong partners such as SponsorPay.com, a community of millions of gamers will be built within a short period of time. The first deal for Germany will be launched online on www.hitfox.de to coincide with gamescom 2011.