Unlocking the full potential of an IPO
Fredrik Johansson, Commercial Director at Fantasma Games speaks to SiGMA News about the studio’s recent IPO and how it will use the funds raised to expand into new markets and carry out M&A while still developing innovative slots
The going can be tough for start-up game studios. This is one of the toughest markets to crack due to fierce competition, regulation and, one could argue, a touch of over-crowding.
Studios have to innovate in order to make an impact and that requires a team of the brightest minds and creative talents in the industry. They also have to have ambitious expansion plans.
All of this comes at a price, and while there are different options when it comes to raising capital we recently took the decision to undertake an IPO and to list on the NASDAQ First North.
The main purpose of this was to raise funds in order to enter additional international markets and to continue developing games that engage and entertain players in ways that go beyond gambling.
We also have plans to drive growth through M&A and required additional funds to undertake strategic acquisitions as and when the right opportunities present themselves.
Our IPO proved to be a huge success; it was over-subscribed by a staggering 1,269% with interest from both large and small investors but in particular Pontus Lindwall of Betsson and NetEnt.
For a smaller studio in the early stages of its life, it was a major indicator that we are doing something right as some of the industry’s high-profile leaders wanted to be part of our journey.
Their expertise and experience will undoubtedly prove invaluable as we take the business to the next level, as will the capital we have been able to unlock through the IPO.
One of the key reasons why we chose an IPO over other methods of fund raising was because of our planned M&A activity and the additional opportunities being a listed company would present.
Instead of having just cash, we can now buy companies through a combination of cash and shares in Fantasma Games, which makes things much easier.
In addition, it adds a layer of trust to the company as in order to be listed in the NASDAQ First North you have to meet very strict due diligence criteria.
This is important when it comes to securing additional funding down the road but also for launching into new markets that are tightly regulated, such as the US.
While M&A and new market entries are exciting and tend to capture the headlines, we also understand the need to keep pushing the boundaries in the games we develop and launch.
The cash raised through the IPO is helping us to do this; we have been able to use it to strengthen our already incredible team with new hires and to provide our developers with more resources.
We have also been able to invest in strengthening our profile in the industry – a tough hurdle to clear for developers with so many studios fighting for the attention of operators.
This has seen us work with a PR agency for the first time in the B2B arena and also divert extra resources to working more closely with affiliates and streamers.
While this remains a tough market for a rising star studio such as Fantasma, our IPO has accelerated our international growth plans, boosted our profile and opened up M&A options for us.
But most importantly, it has given us greater resources that we can use to ensure that our games continue to exceed player expectations as this is ultimately what makes a studio successful or not.
SiGMA Roadshow: Next stop Germany
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