Earlier this month, HIGHLINE portfolio company BlueBat Games announced its acquisition by Greentube Internet Entertainment Solutions, a leading developer of iGaming solutions with a specialization in 3D downloadable games, casino, poker, bingo and games of skill.
Founded in 2011 by Kenny Huang and Tim Harris, BlueBat Games is based in Vancouver and was part of GrowLab’s 2012 accelerator program. The social gamification engine for casinos and social gambling allows game developers to socialize their games on the social web and mobile space. Prior to the acquisition, BlueBat Games had been working with Greentube on several projects, and will now focus on developing white label solutions for casino operators.
“We’re thrilled for Kenny, Tim, and the whole BlueBat team for what will be an exciting next chapter in their growth,” HIGHLINE’s Co-Founder & CEO Marcus Daniels told BetaKit. “This is a great win for the HIGHLINE model, as it is one of the best financial outcomes so far from a Canadian accelerator with a double digit multiple return.”
We connected with Kenny, BlueBat Games’ Co-Founder & CEO, shortly after the acquisition to talk about his experience growing — and exiting — the startup, lessons learned along the way, and how his experience with HIGHLINE (then GrowLab) prepared him for success.
Q&A With Kenny Huang
How did the GrowLab experience prepare you for success?
The GrowLab experience was quite individual for every startup — it really depended on the mentor you were paired with. For us, it was easy to see that a lot of our decisions, strategies, and approaches were as a result of being a Jason Bailey disciple.
More so than the actual business strategies — which you can always learn from books, classes or just Google — it’s about having that mastermind group that can challenge you, grow you, and stretch you beyond what you believe you’re capable of.
Personally, GrowLab helped me overcome my fear of public speaking (a big problem if I wanted to be CEO). I remember dreading our Monday morning pitch sessions. Ironically, a big part of my role now is presenting in front of large crowds, and I’ve become pretty good at it. The secret is that I’ve never really gotten over that fear, but learned how to do it anyway — that’s a mindset GrowLab instilled in me. I can perform outside my comfort zone.
What are the benefits of being part of an accelerator?
Tim and I were both first-time entrepreneurs. We didn’t know whether we were doing things right, and we questioned everything we did. What we needed was experience.
The accelerator was a good experience in that the mentors passed a lot of their hard-earned lessons down to us. “Don’t do what I did…” were the famous last words of our mentors, and those lessons resonated with us. We mostly avoided the mistakes our mentors warned us of, although that just meant we made new mistakes.
Of course, there were other more tangible benefits to the accelerator too, such as the networks, funding, and connections with other entrepreneurs.
When is the right time to join an accelerator?
As with anything timing-related in a startup, the right time was yesterday. The accelerator was really only 10% of our overall timeline from conception to exit; however, it marked an important time because it allowed us to put all the initial start-up romance hype behind us. And it marked an important milestone.
An accelerator can offer the tools, network and confidence to an entrepreneur, but an entrepreneur still has to build his/her own business. Logically, that means joining and graduating as early in the startup timeline as possible.
What was the most valuable lesson you learned building BlueBat Games?
That getting paying customers is hard — very hard — and much harder than building a great product. The two appear the same, but are quite different. That whole notion of “build it and they will come” only happens in 1) Kevin Costner movies, or 2) 1 of the 10 truly lucky viral apps out there.
If you’re an investor and you’ve been pitched with the “We’ve got great metrics and we haven’t even marketed,” your initial reaction should be, “Why haven’t they try to market it? Is there something wrong with their product that scaling means breaking those vanilla metrics?”
What excites you most about being part of Greentube?
Greentube was a strategic partner even prior to talks of M&A. What excites me is that they’ve bought into our vision. I still have the GrowLab demo day slide — no one understood what I was talking about, but Greentube did, albeit two years later.
How did you know it was the right time to sell?
On an infrastructure level, we needed to scale. We had to either do a large financing round or M&A. Greentube made sense.
On financial terms, ever since GrowLab, we’ve had a target exit price in our minds. From there, visualizing was a lot easier because we understood what type of business we were building and how much intrinsic value we needed to create for that target price on the market. Having that target exit from the beginning also kept our greed in check.
We had a lot of individuals on our cap table as wanted to share our success. When the offer came, not only did it exceed our expectations on the target exit price, but it also meant there would be significant cheques for a lot of people. From that perspective, it was an easy decision as it meant a lot of happy individuals.
That said, the actual M&A process was strenuous, and something no one really talks about.
What advice do you have for new founders joining HIGHLINE?
First, let me say that I have so much respect for anyone willing to go after their dreams. Many people talk about doing “something” but most will make excuses, and few will have the courage to actually take action. So big kudos to these new founders!
Something that has helped me is understanding time frame, which is different from timing. As a CEO, what you’re focused on this moment are things that will happen 6+ months down the road, so you might as well be optimistic, keep the vision of success in mind, and believe in it. Then as often as possible, switch time frames and look at how much you’ve achieved, because time flies when you’re having fun.
Follow Kenny on Twitter: @gamestudioceo
Official BlueBat Acquisition Press Release:
LONDON, UNITED KINGDOM–(Marketwired – Feb 2, 2015) – ICE, Totally Gaming Conference, London, February 2, 2015 – Greentube, a leading developer and provider for internet, mobile, PC and iTV and their parent company, the Novomatic Group, today announced that they have acquired a controlling interest in the social gaming leader, BlueBat Games.
Based in Vancouver, British Columbia, BlueBat Games enables game developers and casino brands to socialize their games on browser-based and mobile platforms. Blue Bat Games is the creator of Greentube’s turnkey private label social casino marketing platform, Greentube Pro.
The Acquisition further expands the Greentube presence in North America by providing the multinational company with a technology extension. As part of the Novomatic Group of Companies, Greentube will look to BlueBat to develop white label solutions for casino operators.
“We worked closely with the BlueBat team on a number of projects in the past year,” said Thomas Graf, CEO of Greentube Internet Entertainment Solutions GmbH. “After the launch of Greentube Pro, it became apparent that BlueBat and Greentube’s approach to social gaming were in direct alignment. The Acquisition was the next logical step in our progression.”
Founded in 2011 by video game industry veterans Kenny Huang and Tim Harris, BlueBat’s platform-agnostic social gamification engine for casinos and social gambling game developers is considered an integral element to the nascent social gaming industry.
“This acquisition represents the next jump in our development as a company,” said Kenny Huang, CEO of BlueBat Games. “We work within an extraordinarily dynamic industry. Our alliance with Greentube strengthens our ability to deliver the best possible social gaming platforms in the most expeditious manner.”
According to Eilers Research, the global social casino games market will reach $2.6 billion with 31% year-over-year growth. Facebook social gaming revenues are estimated at $322 million with 6% quarter-over-quarter growth.
Greentube Internet Entertainment Solutions is a leading developer and provider of iGaming solutions for the Internet, mobile devices and iTV, specializing in the development of 3D downloadable games, casino, poker, bingo and games of skill. Founded in 1998, Greentube is a wholly-owned subsidiary of The Novomatic Group, one of the biggest producers and operators of gaming technologies and one of the largest integrated gaming companies in the world.
About BlueBat Games
Based in Vancouver, British Columbia, BlueBat Games is the team behind the BlueBox Engine, a platform-agnostic social gamification engine for casinos and social gambling game developers. Founded in 2011 by video game industry veterans Kenny Huang and Tim Harris, BlueBat Games was selected as one of five start-ups to take part in GrowLab’s 2012 Accelerator Program.