This month Kuuhubb celebrates its first anniversary. It is rare for a company to become a public entity within the first year of operations, but for us it has always been an integral part of the overall vision and plan, along with the goal of creating global distribution for a portfolio of best-of-breed digital entertainment assets. Within the past 12 months we have made 3 investments/acquisitions, recruited a top-notch team, raised two funding rounds, listed the company on the Toronto Venture Exchange and initiated creation of a truly global distribution channel.
It has been a hectic but truly rewarding year. After living in Asia (India, Japan and China) over 15 years, I am now able to use all the accumulated contacts and deep market knowledge to help leap-frog over the usual learning curve and achieve fast results. Back in 2005, when I was in Beijing running Habbo.com in China, the entire gaming ecosystem was based on paid downloads or monthly subscriptions. We were a pioneer in free-to-play games-as-a-service communities, already looking at users through the lenses of in-game activities, user generated content, campaigns, conversion, retention and average-revenue-per-user. Today, over a decade later, focusing on these key performance indicators and operating games-as-a-service rather than simply shipping them has become the industry standard in mobile gaming.
In the digital entertainment industry great companies have always been created hand-in-hand with emerging new platforms or segments. Zynga with Facebook, Rovio and King.com with the iPhone App store and Supercell with iPads, to name a few. Today the core gaming market is maturing and highly monetizing games are dominating both the charts and the advertising channels, making it harder for new entrants to break into top 10 or even top 50.
At the same time a new segment is emerging and increasingly entering the top 20 grossing list. Steadily smartphones and tablets have become the go-to devices not only for gaming and communication, but for lifestyle as well. Meditation, karaoke and creative apps have discovered that “the old playbook” works well and there is a full circle back to subscription-based monetization. In my opinion becoming a category leader and creating a vibrant community around a lifestyle segment is currently the biggest opportunity in digital entertainment. Kuuhubb recently announced its intention to acquire one of these category leaders, Finnish Sumoing, which is behind the successful coloring community Recolor that has over 20 million total installs.
Our fundamental mission is to identify, acquire and accelerate the global growth of potential category leaders, particularly in the hard-to-enter Asian market. While we have only just begun to apply our growth engines to our portfolio companies, I am very proud of what we have already accomplished.
The success of Kuuhubb will ultimately be valued based on the sustainable growth of our companies and the unique go-to-market distribution we are creating, be it through top US brands, Bollywood celebrities or strategic Japanese partners.
I am excited on what we have planned for the future and can’t wait to see how our execution of combining high growth and profitability will create substantial shareholder value going forward.