Just as Blyk, an ad-funded, youth-oriented mobile virtual network operator, announced their partnership with Aito, they come and announce that they have closed a significant funding round of 40 million euros ($50.4 million) from their existing investors, which include Goldman Sachs, IFIC and Sofinnova Partners. Considerign the current economic climate this achievement is that much more significant.
But by following the news one can’t but wonder whether Blyk is a startup anymore at all. MocoNews.net, a news site covering the business of mobile content, reports that just as Blyk took in the investment it also announced lay offs.
Here’s a quote from Pekka Ala-Pietilä, Blyk CEO, on MocoNews.net:
[…]we are experiencing tougher times and unpredictable times ahead of us, and we like everyone else are feeling the impact, so we have to be well prepared and to do things differently internally. We are working more smartly, and we have to cut the number of people. But I can’t disclose that number.
So on one hand you have the 40 million euro that just came in and on the other you have a group of people whose services are not needed anymore at Blyk.
As said times are tough for those who try to raise financing. VC funds don’t just give out money, but the firms need to work hard to get it in and commit to certain conditions. Add to that the fact that one of the investors that is part of the 40m euro round is the infamous Goldman Sachs who is known to be cut throat in everything they do, and you start to see why Blyk partly adjusted their strategy (new partnerships with operators), and especially why the people who were there for the startup stage need to go. The firm is not a startup anymore, but a full blown company that needs professional management, not some quirky founder DNA. At least this is how the investors see it and after all they are calling the shots when one decides to take that route.
We all grow up, even startups. Regardless, ArticStartup congratulates Blyk by pulling this off when most companies are busy telling each other how they should stop thinking about growing and start thinking about surviving.
Here’s what a Finnish serial entrepreneur and dealmake Taneli Tikka makes of the news.