ACQUISITION OF THE YEAR

Acquisition of the year We reveal the background of the Nanobit download: 'This is an insanely big deal' AUTHOR: Bernard Ivezić PUBLISHED: 9/18/2020 at 11:49 Zagreb, 170414. Alan Sumina and Zoran Vucinic, owners of the company Nanobit, which deals with the development of software for mobile games. Photo: Sandra Simunovic / CROPIXCROPIX Alan Sumina (left) and Zoran Vučinić, owners of Nanobit Alan Sumina and Zoran Vučinić , the founders of Nanobit, are the first two big startup millionaires in Croatia, each with around HRK 200 million in their account. Related news The game of the Croatian gaming studio became a real hit in Arab countries Korona can't do anything to them: While others record losses, their revenues will exceed HRK 400 million On Thursday, the Swedish publisher of computer games Stillfront Group, which has been frantically buying free-to-play studios for mobile games in recent years, announced that it would take over Croatia's largest mobile game maker Nanobit for 125m euros or nearly a billion kuna. This is the largest acquisition not only in Croatian gaming, but also in the overall domestic IT industry, comparable to large acquisitions in telecommunications and agriculture. Serious work The acquisition of Nanobit is far above, for example, the amount that Hrvatski Telekom set aside for the IT company Combis (EUR 25.5 million), and it also exceeds one of the larger acquisitions in tourism, when Valamar took over Hotel Makarska for EUR 23 million. The takeover of Nanobit is closer to the amount given by the United Group for the third mobile operator Tele2 Croatia, 220 million euros, or the amount given by the French Lactalis for Dukat, 280 million euros. According to the terms that Croatian startups agreed with Stillfront Group with the help of EY, and which the Swedes meticulously published on their website, Alan Sumina and Zoran Vučinić, each separately, can expect to have around HRK 200 million, non-taxable. In addition, each will receive another 90 million kuna in shares of Stillfront Group. In this way, the first part of the acquisition will be realized, in which Croatian startups will transfer 78 percent of Nanobit's ownership to the Swedes. In the second round, in two years, according to a similar model, 70 percent in cash and 30 percent in shares, they should have a difference of a maximum of 48 million dollars or about 300 million kuna. The amount to split again. All of this did not include fees to intermediaries and EY, but the Stillfront Group did not go into such details. When all these numbers are known, it is not unusual that there was excitement on the domestic investment and gaming scene. There are other companies, such as Infobip and Rimac Automobil, whose founders sit on shares that are worth much more, but in the domestic startup world no one has yet managed to sell their business, or make an "exit" in the amount achieved by Alan Sumina and Zoran Vucinic. Stevica Kuharski, principal and scouting manager of the largest Croatian WC fund Phil Rouge Capital, says that the acquisition of Nanobit is very important for the domestic ecosystem because it shows that Croatia can be done "insanely" and succeed in a highly competitive industry. “Alan and Zoran are committed founders and have managed to make the company interesting for the acquisition because over the years they have built a brand and strong creative teams that worked on content interesting to the target audience, which ultimately led to the growth of active users. successfully converted into customers, ”says Kuharski. Business climate He states that this is how they managed to find the "holy grail" of a startup that makes its own products and insists on it. Kuharski points out that such successes attract foreign investors and strengthen the ecosystem in Croatia. “We at Phil Rouge Capital are overjoyed for their success,” Kuharski says. Lovro Nola , director of the largest Croatian video game academy Machina, states similarly . Nola says that after such an influx of capital into the hands of experienced founders, in the gaming industry in Croatia, a similar effect could occur that happened in Estonia after the sale of Skype. Namely, Alan Sumina and Zoran Vučinić could start investing in startups, and mostly in those that come from the industry that does business best. "Maybe this will encourage the Rimac effect, where the founders of Nanobit will become a bridge to their buyer-investor or a studio that will start acquiring smaller gaming studios in Croatia, or they will merge such studios with Stillfront. But either way, this is very positive news for the domestic gaming industry, Nola concludes. Founders of Nanobit: With this business, we are gaining additional momentum Alan Sumina and Zoran Vučinić gave a joint statement on the occasion of the takeover. They say the mobile gaming industry is growing fast and globalizing and that if they want to stay number one, they have to move forward. “By joining the Stillfront Group, Nanobit is gaining additional momentum that will allow us to continue growing, developing new ambitious plans and projects. It is quite natural, given that we are in a position to choose a strategic partner, to choose one that fits into our culture and long-term vision. All those qualities that we nurture internally, entrepreneurial spirit, independence and innovation, we saw in the leadership of the Stillfront group. We look forward to working with other successful studios within Stillfront, which will further accelerate the development of both Nanobita and Stillfront Group, and our employees will have the opportunity to work with the best in the world, ”conclude Alan Sumina and Zoran Vučinić. The gaming community went silent when word of the price spread In the afternoon, immediately after the announcement of the acquisition of Nanobit, most of the discussions in the gaming community were colored by disbelief due to the amount that the Swedes set aside for the Zagreb studio. However, the answer to this dilemma was given by the buyers from Sweden themselves. According to Fina, Nanobit had revenue of HRK 195.2 million last year with a net profit of HRK 17.6 million. The Swedes, on the other hand, announced that in the first half of 2020, Nanobit recorded a rapid increase in revenue to HRK 236 million with an operating profit of HRK 44 million. By the end of the year, they say, the Croatian studio, which currently employs 125 experts, aims for revenue of around 460 million kuna. Nanobit produces mobile games for women who use smartphones. They sell their games in 150 countries, the most popular being My Story, Hollywood Story and Tabou Stories. They have 145 million players. Jörgen Larsson, CEO of Stillfront: With Nanobit we get a very talented team “Over the past 12 years, Alan and Zoran and their team at Nanobit have built an impressive gaming studio with a solid niche in the exciting genre of lifestyle games, and we look forward to working with them to take the company to the next level. The core gaming portfolio has seen impressive growth over the past year, and we see strong growth potential in the future, including promising new games in development, ”says Larsson.