The Story Behind The Supercell Deal: Interview With CEO, Ilkka Paananen

    Three years and a $3 billion dollar valuation. Not sure about you, but this has not quite settled in my mind completely yet and I had a lot of questions about the deal and what it might possibly mean for the company and the local startup scene.

    So we reached out to Ilkka Paananen, the CEO of Supercell, who is the best person to answer these types of questions. In the interview, we first confirmed a few factual questions, before going into the emotional and personal ones.

    As Paananen told us, every existing shareholder got to sell 51% of their current holding in the company. This means that no new shares were created and the money went to all previous shareholders.

    Does this mean that Supercell as a company did not get any money? Yes, but that does not mean this isn’t good for them, as Paananen has often said – it is not about the money. It is about the long-term vision, the connection between the two companies and long-term goals of doing something great together. Of course the fact that SoftBank has a market capitalisation of over $40 billion can come in handy too.

    When talking to Paananen, you could feel the excitement but at the same time the calm that this deal brought. It was interesting to notice a complete distance from the actual money that was involved, but also an understanding of what it will mean for the local community. So without further ado, here it is in full:

    ArcticStartup: Could you tell us a bit more about the story about the deal and what lead up to it?

    Ilkka Paananen: I think that it all started earlier this year. We started to get quite interested in the Japanese market. People thought that we were crazy because we were so excited about it. Lots of people thought that Japan is a big graveyard for western game companies. But you know, we wanted to try and we established this partnership with GungHo and localized Clash of Clans in Japanese, established the office and launched the game and we started to do quite well in the Japanese market. It broke through and was number 3 at the highest. it was the only Western game in top 10.

    After that we also localized clash of clans into Chinese and also that went really well without any kind of marketing. It climbed to be number 2 position in China and again the only western game in top 10. One of our aspirations has always been to be a truly global mobile games company, which I talked about in my blog post.

    Then Softbank contacted us and we started to talk to those guys if we could do something together. Then everything started to move rather quickly as we were both equally excited by the opportunity of partnering up. With those guys we could accelerate ourselves towards being a truly global games company.

    ArcticStartup: What do you mean when you say a “truly global” games company?

    Ilkka Paananen: A truly global games company is the one that has very global game franchises and these franchises they can have an equally strong market share in all of the big western markets: North America, Europe and so on and also in each and everyone of these big three asian markets: Japan, Korea and China. So if you can combine all of them, then you are truly global and you can unite the gamers on a global level, playing one game.

    ArcticStartup: How is it going to affect the Finnish Startup scene and if you ara going to invest either personally or through Supercell, what would you be looking for?

    Ilkka Paananen: At the time when we started Supercell, we were incredibly inspired by the success of Rovio. So it was a really inspiring seeing Angry Birds doing so well. They have become one of our role models.

    Now of course, we hope, that maybe our success also inspires some other people to try and found their own startup and get going.

    And you know in terms of our support for the startup scene, my dream has for a long time been that Finland and especially Helsinki could become the Silicon Valley of Europe.

    And we have previously been big supporters of the local startups, for example I have been a partner in Lifeline Ventures that supports small companies. Of course, with financing that for example me and Mikko personally got, that will enable us to do even bigger things. The idea really is to pay it forward to the local startups.

    Probably not by investing directly but investing through funds like Lifeline for example.

    ArcticStartup: There is a lot about success of Supercell. However what were some of the failures and what would you do differently if you had the chance?

    Ilkka Paananen: Haha. If we start to talk about our failures, we will probably spend the rest of the day on the phone. You know we fail way more often that we succeed. That’s the truth. We build so many games and only two have been successful. We have changed the strategy along the way and it is really hard to point to specific examples but we definitely had our fair share of challenges too.

    ArcticStartup: What about you personally, how does it feel to be a multi-millionaire?

    Ilkka Paananen: You know, I mean I have never worked for money so it really does not change in my life. Actually, I don’t know how it feels, I have not really thought about it.

    ArcticStartup: What was the first thing you did after you signed the deal?

    Ilkka Paananen: I think I walked back to my desk and continued working and then all the interviews started to come up.