Indonesia-based gaming studio Touchten announced today that it has secured a Series C round led by Japanese mobile and social firm GREE, with US-based 500 Startups as a follow-on investor. The investment amount remains undisclosed.
Founded in 2009, the company first raised its Series A round of funding from Indonesian incubator and venture capital firm Ideosource and Series B round of funding from Japanese venture capital firm CyberAgent Ventures. It remains undisclosed how much money Touchten has raised to date.
According to Anton Soeharyo, CEO of Touchten, the new investment will be spent on hiring and marketing its offline-to-online platform and games. The firm currently hires 35 people, and is looking to double that by Q1 2016.
He added that Touchten titles have garnered more than 12 million downloads worldwide. About 1.5 million downloads can be attributed to Indonesia. Its best game for the Indonesian market is Teke Teki Saku, which he claims has bagged more than 800,000 users, followed by puzzle game app Dagelan, which supposedly hit the 400,000 users milestone within one month.
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In the coming year, Soeharyo and his team will be working with GREE to release the latter’s casual game titles in Indonesia through Touchten.
“Southeast Asia is a market they (GREE) want to go to, and if the timing is right, they are looking to enter the market,” said Soeharyo. “They feel that they need to go to the ‘biggest’ market which is Indonesia, but prefer to invest in (a) company that they know have potential. And they chose Touchten.”
To date, GREE Inc has invested in multiple Asian companies including Japan-based news app company SmartNews and last-minute hotel booking company HotelQuickly. Its investments should not be confused with those of its venture capital arm GREE Ventures, headed by Yusuke Amano.
Thank Facebook for this
In conversation with this author, Soeharyo recounted how he has a private message on Facebook to thank for the investment deal going through.
It all began about two years ago, after he announced securing CyberAgent Ventures as a lead investor for Touchten’s Series B round.
“… A random Japanese guy I met on Facebook asked me to meet up (with him) and asked for me to share with him about fund raising strategy,” he said. “I could have said no, or ignored the Facebook message, but I was in Singapore attending Casual Connect at that time, and had some free time so I did — with no intention of anything coming out of the meeting. We talked for two to three hours and said our goodbyes.”
Fast forward to two years later, Soeharyo found himself in the middle of the arduous fund raising process again. He was fatigued, worn out by the numerous rejections he received from venture capitalists insistent that Touchten is just “another gaming studio”.
“It’s true, I spoke to 67 venture capitalists in the last 12 months. If you count it, it’s almost one to two meetings a week. Most of them are not keen on gaming,” he said.
It was then that he ran into Yoshiaki Ieda, CEO of JobForward, the same man who approached him two years ago.
They spoke at Soeharyo’s office, and like most entrepreneurs, talked about fundraising. “I said, yeah, any intro would be nice,” recounted Soeharyo. Ieda then introduced the former to his investor Hideki Fujita, who founded Coent Venture Partners.
Patience is a virtue
“Then this guy (Fujita) was super busy,” said Soeharyo, “and we ended up cancelling our meeting twice before deciding a date, and because it was Singapore time that he thought we were supposed to meet… I started to lose respect because I had to wait for an hour, and thought I was about to get stood up. I was sick at that time too, really wanted to close the laptop and sleep, but I decided to wait.”
His waiting paid off. “There he was, apologising and it turned out he was the nicest person,” said Soeharyo about the man who would eventually introduce him to GREE. After all, he was an ex-GREE executive, and handled the acquisition of studios for the Japanese firm, which includes purchasing PokeLabo for US$173 million.
At that point, just before introducing Soeharyo to Yuta Maeda, Board Member and VP, Pokelabo and Asia Business at GREE, Fujita noted to the entrepreneur that GREE is a big company and might not reply. Soeharyo still agreed, thinking that anything is better than nothing.
As promised, Fujita wrote an email introducing Soeharyo to Maeda. To Soeharyo’s surprise, Maeda, though busy, replied in a couple of minutes. The two scheduled a call the following week.
“I didn’t want to sound desperate, and I didn’t want to sell the idea of investment on a first meeting,” said Soeharyo, “so I sounded cool.”
“I kept telling myself, ‘Anton, just sell them on the idea of working together, that’s it… Don’t talk about investment, don’t talk about investment and drive them away’,” Soeharyo said.
Seizing opportunity as it presents itself
“At the end of the Skype meeting, Maeda-san asked me a very peculiar question: So before we say goodbye, is there anything you need help from us? What do you expect from GREE Group? I told myself, if I don’t pitch now, there is no chance,” he recalled.
“Firstly, I want us to collaborate to publish your game in Indonesia and vice versa,” said Soeharyo.
Maeda then asked, “Is that all?”
Soeharyo replied, “Wait… we are actually in the middle of fund raising.”
“Why didn’t you say so?” asked Maeda again, but this time, he was almost shouting. “When are you in Japan?”
Two weeks later, on April 27, Soeharyo arrived in Tokyo, Japan, and met up with Maeda and his colleagues.
“And he (Maeda) told me: Within two weeks, we will let you know if we are in or not,” said Soeharyo. “Then they came to our office too, and then sealed the deal verbally. But I knew they came to say yes.”
All parties, including 500 Startups, signed the deal and made it official on June 30.
The rest, as they say, is history.