Candy Crush bosses set to taste sweet success with flotation of gaming firm

Candy Crush Saga Screenshot

The London-based company behind Candy Crush, the wildly popular smartphone game, will be valued tomorrow at almost $8bn (£5bn) when it makes its debut on the New York Stock Exchange, making it the most highly prized British firm to emerge from the technology boom.

A dozen directors at King Digital Entertainment will become vastly wealthy on the back of the flotation – rich even by Silicon Valley standards – including a former director of Derby County FC, chairman Melvyn Morris, who could be worth $875m.

The company's Italian-born chief executive, Riccardo Zacconi, 47, stands to make a paper fortune of $745m while Sebastian Knutsson, the Swedish creative mastermind behind the game, is set to make $422m.

Candy Crush has captured the fleeting attention spans of mobile phone users around the world and the company claims it is now played one billion times a day. The aim of the game is to reach a target score by making sweets disappear from a colourful grid. Line up three or more and the row explodes, lighting up the screen like a pinball machine. Knutsson, an avid gamer, said that his vivid designs are inspired by the aesthetic of pioneering arcade games such as Pac-Man, Space Invaders and Tetris.

The games are downloaded for free but millions of gamers are prepared to spend £1 for "paid boosters" including lollipop hammers, coconut wheels and extra lives. King made nearly $570m after tax last year on revenues of $1.88bn.

King's game designers and administrative offices are in London's West End, with reports suggesting it is preparing to expand into Facebook's former building in Covent Garden – although the company is registered in Ireland for tax purposes. It also has a sizeable studio in Sweden, reflecting the strong influence of Scandinavian expertise in its success.

The company is expected to be valued at $7.6bn when trading in its shares begins. Investors have shown a renewed appetite over the past year for technology firms, with Twitter enjoying a successful stockmarket flotation last year – it is now worth $30bn – and UK online retailer Pets at Home being valued at £1.2bn when it floated this month.

According to one of the company founders, King has worked hard for its success, surviving a number of changes in the fickle tastes of the digital generation.

"It's not a fairy story," says former director Toby Rowland. "There were some very difficult times. But we had a good corporate culture, there was a stoicism in the tough times that was very useful." Rowland will miss out on the riches, having sold his stake in 2011 for $3m, shares that would be worth an estimated $966m if he had held on until the flotation.

King was founded in 2003 after Zacconi, Morris and Rowland – son of Lonrho tycoon Tiny Rowland – met working on a matchmaking site called uDate.

Morris, 57, is a self-made millionaire who left school at 16. The Midlands entrepreneur was working as a management consultant by the age of 20 and founded a dating agency in his home town of Derby in the late 1990s.

Always interested in technology, Morris transferred the business online.

He persuaded Rowland, somewhat bloodied from the collapse of his first online venture, a health and cosmetics website called Clickmango, to invest and to move to Derby to help run the company. By the time uDate was sold to an American group in 2003 for $150m, it was the world's second largest matchmaking site.

After uDate was sold, the trio teamed up with a group of Swedish entrepreneurs to create a gaming website called, which was soon attracting millions of users and was a big hit in France, Italy and Germany.

But the arrival of Facebook saw lose 45% of its traffic as audiences deserted portals such as Yahoo! and AOL that had funnelled gamers to its site.

Having adapted to the arrival of Facebook with an early version of the Candy Crush format called Bubble Saga, King was primed to make the switch to mobile technology when that format took off in 2011.

At $24 a share, investors are buying into the company's reassurance that it has a pipeline of new hits if people get bored of Candy Crush.

The company has invented and registered around 180 games, with new releases Pet Rescue and Farm Heroes also making the top 10 smartphone game downloads in recent months.

The numbers downloading Candy Crush have inevitably fallen – it has dropped to number 18 in the Apple iOS games charts in the US – but it remains the second highest grossing after rival Supercell's Clash of Clans.

Zacconi attempts to brush off fears in the company's share prospectus that it is over reliant on its biggest hit: "We believe King has been built for the long haul."

It is a point echoed by Rowland. If Candy Crush does fall out of favour, he is adamant that the company can pick itself up. If King had a theme tune, muses Rowland, it would be Gladys Knight's Imagination, with its message to "keep on keeping on".

Melvyn Morris


Chairman, estimated value of shareholding $875m (£530m)

36,467,500 sharesA self-made millionaire, Morris has chaired King since 2003. He left school at 16 and by 20 was earning a living as a management consultant. He worked in the US but returned to Derby, his home town, and started a handful of businesses including a hardwood flooring company, a Spanish property group, and a dating agency. Morris hit upon the idea of transferring his matchmaking skills to internet dating and the venture took off. When uDate was sold in 2002, it was the second-largest dating site in the world. Morris netted £20m and spent part of the money buying a stake in his beloved Derby County football club and part of it establishing King.

Riccardo Zacconi

Chief executive, $745m

31,042,045 shares. King's urbane Italian chief executive was born in Rome, where he studied economics, and started his career at Boston Consulting. He was lured into digital business during the dotcom boom, and ran the German unit of a Swedish web portal called Spray, which failed to make it to the stockmarket before the bubble burst. Zacconi moved to the UK in 2001 to look for digital investments, and by 2002 had been persuaded to join one of Europe's first online matchmakers, uDate. Soon after, the company was sold for $150m, and merged with With colleagues from Spray, he finally launched King, and persuaded some of uDate's backers, including Melvyn Morris and Toby Rowland, to join the new venture. Spray missed its window to make it rich after delaying its IPO by a month, and had to be sold to Lycos instead. Zacconi's timing looks better with King.

Sebastian Knutsson

Chief creative officer, $422m

17,596,075 shares. One of King's founders, Knutsson is the company's creative mastermind. He recently claimed to have designed 10 of King's 15 worst games – the company has made 180 so far – but it was from his Stockholm studio that the mega-hit Candy Crush emerged. A keen gamer himself, his vivid designs are inspired by the multicoloured, flashing, bleeping arcade games of the last century, from Pac-Man to Space Invaders and Tetris. But he also has a business brain, thanks to a BA in cost-analysis and finance from the Stockholm School of Economics, and comes from a family of entrepreneurs – his parents ran a denim brand and retail chain, and his sister has her own clothing company. Knutsson co-founded Spray, the internet portal at which he met Zacconi.

Lars Markgren

Sweden general manager, $217m. 9,043,930 shares.

Stockholm-based Markgren worked at the European internet portal Spray, along with many of King's founders, before moving into gaming. He manages the pivotal Swedish operations and balances work with a passion for pike fishing.

Stephane Kurgan

7,450,748 shares. $179m

King's Belgian chief operating officer holds an MBA from France's prestigious Insead, and came to King from data-centre management business Tideway.

Patrik Stymne

7,040,000 shares. Chief systems architect, $169m

Stymne is not on the board but he is named as a co-founder. One of the technical brains behind King, he designed the company's IT system, having previously worked alongside co-founder Knutsson at the early internet search engine and portal Lycos, the digital advertising agency Razorfish and Spray, the Swedish-owned portal.

Thomas Hartwig

6,350,000 shares. Chief technology officer, $152m

Another co-founder, Hartwig is the brains behind King's data strategy, harvesting information from the 1.4bn game plays a day to hone each product from its testing phase on the website through to its launch as a standalone smartphone app. Hartwig is based in the Swedish town of Malmö, but he places data scientists in each of the small, typically 10-strong teams developing new King games, collating user experience to decide, for example, how difficult to make each successive level. Like his co-founders, Hartwig cut his teeth at the Swedish internet portal Spray.

Gerhard Florin

1,125,000 shares. Non-executive director, $27m

Having joined the board during the hard times in 2010, Florin has stuck around long enough to reap the benefits. Now a full-time non-executive director, he spent 14 years in senior roles at Electronic Arts, the world's third-largest gaming company and maker of the Fifa football games and sci-fi shooter Titanfall.

Apax Partners

144,330,001 shares. Investor, $3.46bn

King was one of the last venture capital investments made by Apax, which now focuses on taking more mature companies private. It is also the British buyout firm's most successful bet to date. Apax, whose holdings include the fashion chain New Look, the Orange mobile network in Switzerland and a trade publishing joint venture with the Guardian's parent company, injected about $36m in 2005, and its 48% stake is now worth almost 100 times that.

Index Ventures

24,992,502 shares. Investor, $600m

Index is a legend in technology venture capital, having backed Facebook and Skype, as well as British successes such as the clothing retailer Asos, and Moshi Monsters maker Mind Candy. Index invested alongside Apax in 2005, putting in an estimated $7m.

Toby Rowland

No shares. Founder, $0

Toby Rowland co-founded King with Morris and Zacconi, and was co-chief executive until 2008, but he sold his shares in 2011, just months before the company launched its first hit Facebook game. He is married to the author and Vogue journalist Plum Sykes, and his father was the mining tycoon Tiny Rowland, who once owned the Observer and House of Fraser department stores. He was persuaded by Morris to move to Derby and become marketing director of their previous venture, uDate. He invested and shared in the spoils when the matchmaking site was sold for $150m in 2002, using the proceeds to set up King. Despite backing King for eight years, like the founding Beatles member Pete Best, Rowland left too early to share in its success. His 40m shares were sold back to King for a mere $3m, according to data from PrivCo. Had Rowland stayed in, he would have been King's largest individual shareholder today, with a stake worth up to $966m.

Powered by article was written by Juliette Garside, for The Guardian on Monday 24th March 2014 22.13 Europe/London © Guardian News and Media Limited 2010


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