The mobile game Shadow Cities redefined the industry and attracted significant investors from around the world.
In February 2011 Grey Area closed a significant investment round, helped by the strong performance of their game Shadow Cities. A year later, they are consolidating and expanding their hold on the mobile gaming market.
Shadow Cities is a location-based game, where the gaming area is the user’s actual physical location, made possible through a smart phone’s GPS service. The player’s city literally becomes the game’s locale, where neighbourhood landmarks become “gateways” that are fought over by different factions.
The game has proven to be both popular and critically-acclaimed, with reviewer Seth Schiesel of the New York Times famously saying: “I have played the future of mobile gaming. It is called Shadow Cities.”
“2011 was a big year for Grey Area,” confirms CEO Ville Vesterinen. “We raised $2.5 million from top tier investors including Index Ventures, London Venture Partners, Initial Capital and Lifeline Ventures. Not only that, we also grew from four founders to a stellar team of eighteen and are now more ready than ever to change the mobile gaming space for good.”
“Perhaps once a year you catch a glimpse of something that you feel signals a new direction for an industry or a breakthrough experience for consumers,” wrote Index Ventures’ Ben Holmes when the company invested in Grey Area. “I remember feeling this way when I first saw Skype and Spotify. You get the same sense of opening a small window to the future when you first see Shadow Cities.”
Holmes cited four main reasons why Grey Area was such a compelling investment case. First, the iPhone ecosystem is an exploding market. Second, Grey Area had the right monetisation model. Thirdly, the company had positive early traction, because the early test of Shadow Cities in Finland showed very promising metrics. Finally, there was the team.
“They were just four people when we first met, but had already achieved a lot in a short timeframe and on a shoestring budget,” Holmes wrote. “If you want to see how effective entrepreneurs will be once they have money, see how much they can achieve without financing – that is always the best pointer.”
Talking to investors
“Our investors are very professional with several years of experience and know how to work with entrepreneurs better than anyone,” continues Vesterinen. “For us, the relationship has been amazing and the experience very positive.”
Grey Area was able to help develop Shadow Cities after raising a seed round from Lifeline Ventures in 2010, while the addition of the major international investors allowed them to quadruple their team. Vesterinen says they had no problems approaching the big global players.
“It might sound arrogant, but it’s never difficult if you have a great product and a solid team behind it,” he says. “It would have been difficult had we approached them only with an idea, but we didn’t only have a full-blown product in our hands, but we also had metrics on how it performed in the market. This was crucial in closing the round as quickly as we did. The best thing you can show to the investors is a live product and metrics on how it’s performing.
“If you believe you have a great product and team behind it, I encourage people to go directly to the best investors out there. You might want to practice your pitch with a few that are not on top of your list, but then just go directly to the ones you can think can contribute the most to your company. It might not be easy, but if you hustle enough you’ll get the meetings. If you can’t get a meeting with a top investor it’s already a sign of your capacity as an entrepreneur, and a clear signal to the investor itself on how hungrily you will go after what you want. So you should see getting the best meetings as the first acid test in closing an investment from a great set of investors.”
Grey Area has not relaxed since the success of Shadow Cities and the infusion of capital. Their next offering is eagerly anticipated by the public and critics, and the team members have been working hard.
“We are working on a new game which will again redefine what a great mobile game can be, just like Shadow Cities did when it came out,” Vesterinen says. “The new game is built around the familiar Grey Area secret sauce, including location and gameplay that is very social and real-time. I don’t want to tell you too much yet, but to make sure you’re among the first to know, you should follow us at Twitter @greyarealabs.”
Vesterinen spends a lot of his time in America, working with key platform companies, and even has a US mobile phone number. The company is considering opening an office in the States.
“We’re looking into this, but honestly Helsinki has such a great pool of super-talented game developers that we didn’t want to make the move too soon,” he says. “We wanted to focus on building our team in Helsinki. We will always have a very strong presence in Helsinki, but a US office is possible in the not-so-distant future.”
Even with so much to look forward to in the future, Vesterinen can already look back at what they have accomplished so far.
“The most memorable experience must have been the days and nights when we first launched Shadow Cities in Finland,” he reminisces. “We slept very little, put out fires, and tried to keep the game running intact when it felt like most of Helsinki was trying to come through doors and windows. It was super-hectic, but so excited. We were super-charged and kept going, fuelled by nothing but adrenaline.”
Text: DAVID J. CORD, Helsinki Times
Did you know…
Founders: Mikko Hämäläinen, Andreas Karlsson, Teemu Tuulari and Ville Vesterinen
Described as: “A mobile city gaming company using real-world locations as the context for mobile games.”
Big hit: Shadow Cities
Funding: €100,000 seed round in 2010, €1.9 million in Series A in 2011