Swedish Startup Space

Stardoll-founder buys out investors, wants to turn company around by himself

Written by on February 9, 2016

Revenues have plummeted three years in a row. Mattias Miksche is set on turning the company around – without external captial.

Five years ago, Stardoll was on the the greatest success stories from the Swedish tech scene. The company peaked at 22 million monthly users and had revenues of over $20 million in 2012.

In the browser based, sandbox-style game, users can create their own avatars and chose clothes and make up for them. The players can also interact with each other, like in an online RPG, and buy accessories in-game.

The transition from desktop to mobile has been tough for a lot of consumer facing companies, but perhaps even more so for Stardoll, because its user base, girls from 8 to 15 years old, make that transition particularly fast.

Half of Stardoll’s revenues have disappeared and two thirds of its workforce has been forced to leave the company, since the peak in 2012. The number of monthly users has also decreased, from 22 to 8 million.

The company, which has nurtured prominent tech stars such as Spotify-founder Daniel Ek and Lifesum-founder Henrik Torstensson, is undeniably doing far from well, but Mattias Miksche is not ready to give up. He has even bought out his investors, which include Sequoia Capital and Index Ventures, to take the company back to its former glory by himself.

“It’s actually quite simple. I have more belief in the company than they do. It’s a discussion that has been ongoing for a while and I informed all of the employees last summer. I know that we’re not the hottest company in town, but we still have millions of users, a great team and a good brand. We succeeded on desktop and are giving everything we have to succeed on mobile”, Mattias Miksche says.

In conjunction with the buy out the whole company is restructured. Previously, the parent company has been an American corporation in Delaware, with a number of subsidiaries throughout the world. The global company structure has now been liquidated and all operations are now under the Swedish company Stardoll AB.

However, the acquisition doesn’t mean that operations will change, according to Mattias Miksche.

“We’re still focusing on the same two things that we have focused on since 2013: to keep the desktop version alive and create new mobile services. It would be very strange if I, as the CEO of the company, kept my ideas to myself until I bought the company”, he says.

In addition to his job at Stardoll, Mattias Miksche is an active angel investor and a board member of several large companies. Among other things, he has invested in the social fishing media platform Fishbrain and sits at the board of directors of Avanza Bank.

In 2014, Stardoll had revenues of 116 million SEK ($13.6 million) and made a loss of 5 million SEK ($600,000). The financial statement for 2015 has yet to be released, but Mattias Miksche says that numbers are still going down.

“It hasn’t turned around quite yet. We had revenues of about $8-10 million, and made a severe loss. On the other hand, that’s still a very nice number that we can do a lot of new things with”, he says.

Before the acquisition, Mattias Miksche owned just 10 percent of the company. He does not want to reveal how much he payed for the remaining 90 percent of the company. He is also giving some company executives the opportunity to become share holders. However, he doesn’t want to reveal which employees will get the opportunity to buy shares.

“I’m presenting the opportunity to become share holdes. It’s in part because of loyalty and in part because of decency. The didn’t have the same opportunity as me to invest, so I want to offer that now. We’re also launching a new stock option pool for current and future employees. Many more of us need to take part in the upside if we are going to be able to turn this around.”

  • Company
  • Harry van der Veen

    Don’t be surprised if it will recover. If you really believe in it and you work hard, you have a good chance. As the article said, they still have a solid user base. There is a value in that can’t easily be build.

  • truejumpy (sd)

    Maybe if they actually listened to their users feedback the company wouldn’t be going downhill so quickly

  • Taking care of loyal users would be a start.

  • i wonder how long they will survive, but with the current attitude they are having towards it’s users, it won’t last long

    • things they could do…
      + bring back rewarding loyal members (with more than a year of membership) with all of the gifts given to those who take advantage of the “membership running out” offers.
      + bring back decent topping up offers. 50% additional every 3 months. even when you don’t need SDs, with 50% additional, you buy anyway.
      + Fix the system issues on the site. Focus on improving the computer gaming experience, before doing something else.
      + bring back the Catwalk
      + If you have to have something mobile, at least reward dolls with SDs on the computer game for playing one of the mobile games.
      + Update rewards for leveling up, for those us us with high levels, there is nothing to work towards any longer.

      just a few things they could do.

  • Cyber

    instead of focusing on investments they need quality tech team instead of ad campaigns. Web campaigning should take the %3 of the revenue including front-end design(which is %10 out of this %3) , while you need to focus on back-end..you’re still running an application on a FLASH! really??

    I believe their idea of social media maintenance is just on wrong track. also he should be honest about the real volume of “active users” while those millions include one time visitors and fake accounts.

    They also can’t maintain the proper idea of “ad”. Do they even run “analytics”? If I should talk in mind of a sales person, i would set up a ad-block blocker. You can make it in a simple JS code on each header of app. Even forbes.com runs it these days. Or they should make good affiliation with brands. Maybe with brands minor in quality but major in numbers. Nelly is not enough. Mawi is as interesting as nail polishes and perfumes.

    • Cyber

      PS: paperdollheaven founded by Liisa Wrang in 2004, Maattias took the management from Piczo blog in 2009. It was “stardoll” in 2006-7

  • BeChic. [flor_14]

    Being a member from the very start (2006) till now, i believe Stardoll’s golden years were from 2008 to 2012.
    I have so much to complain about (poor graphics and ideas, expensive prices ingame, expensive memberships [above 50% increasement through years], disrespect for their clients, no customer service, we usually get auto replys [!], and a lot more)
    Stardoll MUST undestand that they should focus on their old members more, and not “fishing” new ones who won’t for sure stay loyal to this site after they realise how much it will cost them to enjoy it (Non Superstar new members will find it boring and just stop log in)
    If you want make money stop giving the stardollars away to new accounts ( which most are fake ones) instead of trying rip us off.
    OPEN your eyes, LISTEN to what we complain about, READ these comments with care, RESPECT those who support you all these years & your costumer service replys with disrespect using auto messages, UNDERSTAND Stardoll members who really are active and pay you are 17+ years old and not 8-15 and one day they will just leave you and spend the money they work for in something else instead of a careless virtual world. Your Royalty members if you visit the Royalty club dropped more than 50% (Used to be 50k+ users, now are 20k+) and at last APPRECIATE our effort to keep Stardoll alive.
    Remember how many free gifts, offers, campaigns, contests we used to have the years you really used to make good money as a company and understand that no business who trys to rip their clients off ends well.

  • Seda Barsale

    They shut down the accounts of people in vain company’s regular.. They listen to us a bit, Everything will be the same..

  • Seda Barsale

    hesaplar boş yere kapanmasa şimdi böyle olmazdı.

  • girls_generation_lover_

    8-15year olds?maybe the ones making one not paying account and getting faster away from the site than a ferrari..They should know that the real money paying users are 17+-30 or even 40 year olds and also if the stardoll ”team” would respect or only hear about what the users say to make the site better it would make a big change.

  • Being a member since 2011 I can see how much the site has changed over the years. The first year was golden, I was buying Superstar membership almost every month. With $5.99 I would get 200sd, the ability to exchange 1,000sd for 100sd. It was enough to buy new items and play a lot of mini games. I was able to invest in some nice pieces that I later resold for profit. There were many passes and offers with extended membership and additional sd, sc, and gifts. The best part was that members who had bought membership in advance would also automatically get these gifts. It would entice new members and be fair to loyal members as well. There were several releases and sales every single month. Many of us enjoyed this glorious time on stardoll.

    Now lets fast forward a month of membership costs $6.99 you still get 200sd, but you don’t have the converter. With stardoll’s inflation on price per item 200sd is no where near enough to buy a lot of items. The quality of items for the most part has decreased graphic wise. We are not getting our money’s worth anymore. New members get all the perks and benefits while the loyal members get nothing. No monthly sales take place in starplaza anymore. There are more restrictions to play since everything has to be unlocked now, when it used to be easily available for all. Starcoins are useless now since there just aren’t many sc items produced now, the ones that do get made are usually the worst out of the bunch. Before both sc and sd could get you nice items.
    I don’t understand why after you reach level 100 you don’t receive new gifts or unlock new hair, all you get are a bunch of useless sc that is just a slap to the face for those who have been there long enough to reach such levels.

    A lot of members have left, and I plan on leaving as well if things don’t change for the better. I have gone from spending over $30 a month to $0 some months. I would gladly spend $30 again if the site made improvements. Many other great members have listed them already.

    Just so you know I am 25 and most of the members I know are over 15 years old. Reanalyze your user base and who are the ones supporting an paying you. Listen to them as they will be the ones to help you keep your business afloat and expand it.

    Btw the mobile version of stardoll is crap. It is very limiting and instead of wasting money there try working on the desktop version instead. The desktop is not dead.

    Also as a company you really need to address your security and safety measures. its a joke how many people get hacked and all your staff says is that they shouldn’t of given out their password. You don’t need someone’s password to access their doll.

  • w.ange1

    bring back the beautiful old days

  • I don’t know where to start
    between the browser base games infested with hackers and scammers, full of faults and errors
    their apps which is half done and then completely forgotten
    the majors security problems many users faces

    and all the other problems already listed below

    the CEO has a lot to do to bring the game back to the top

    • w.ange1

      you right

  • SneakyHobbitses

    I’ve been going on this website for ages, since the dressup games were a main part of the website. It is slowly going downhill.
    Loyal members are treated shockingly bad. New members are leaving because it is near impossible to do things without Stardollars, the paid currency.

    For example:
    Ridiculously lax security
    Level-locking just about everything, thus new members are put off
    Duplication of member-created items
    Little to no ways of getting 1 currency [starcoins] without buying a virtual item, which funnily enough, decreases the amount of currency you have, so works backward
    2nd currency Stardollars – near impossible to get if you are not a paying member
    Items decreasing in quality and becoming ridiculously priced
    Memberships increasing in price, but you still get the same amount of items
    Before you’d get sales multiple times a year, now barely anytime
    Lacking amount of items for those who are not members and don’t have the stardollar currency
    Graphic quality is SHOCKING-ly bad. A flat item with a photoshop gradient = not cool
    The Stardoll app for phone has barely any good features, the tablet version is glitchy
    A hacker managed to take partial control of some of the website, hack multiple accounts and we got barely any explanation
    On top of this, still lots of hackers
    Useless updates which glitch, actual updates which are needed are ignored
    Members don’t get taken seriously, just get given automated replies when sending suggestions
    Buying membership doesn’t feel very worth it, considering a lot of the features are getting dumbed down or becoming glitchy, etc

    and more.

  • Pinklovelemons


    • Pinklovelemons

      Close that bullshit site and take me to hollywood

  • Hayley

    Listen to your users, and you will turn the website back around. I have been a paying member since I can remember (2011) and now I no longer pay on a monthly basis because it is simply no longer worth it. In fact, I used to have not one but two paying accounts (I don’t even keep one paying monthly now). Just take in what some have written below and change what we want changed.

  • SneakyHobbitses

    Stardoll is more like Capitalist Central. Look, I don’t mind paying, as long as I am getting a good service. Unfortunately, we are paying for things that were free once upon a time. We put time and money into our accounts, this site. We send suggestions, give constructive criticism and notify them about glitches, bugs and security. An automated reply is sent back to us, or nothing helpful at all. We are not given respect.

  • Annairam SD

    I do not believe that Stardoll will recover from,i believe that he will deteriorate increasingly.My dear,welcome to end.

  • Gazerock-is-not-dead

    stardoll went to downhill mainly for being greedy.
    Stardoll just want profits. Wants to win, but don’t want to give.
    The math is simple.
    If you dont offer quality and respect for free then also you dont get for pay.
    I used to pay for this site since may 2011, now i dont pay in regular basis since 2013.
    and why?
    because stardoll is greedy.

  • SD: ghjjhg1990

    the graphics are so lazily done

  • MIA

    Half of your problems would be solved if you’d listen to the few who’ve already commented.
    You also could get more sales if you’d listen to what the players want as far as fashion, you can’t simply create what you want then sit and wonder why it won’t sell. And another thing is LRE although it seemed like a good idea, it’s more of a kick in the face to your older members and defeating your whole concept of LE you brought to us. Callie’s picks is another issue, I understand the concept but why re introduce items you brought mere months ago? A better way to go with Callie’s picks would be to re-release items from old dress up dolls, maybe forgotten items from 06 that’s be much better than what it is now. Stop trying to focus on mobile when the website and your whole game plan needs so much more attention.

  • I don’t know what I could say about Stardoll that hasn’t already been said here in the comments.
    I have been playing since 2006 and I have seen the rapid decline in the past few years. We aren’t getting our money’s worth when we buy stardollars because everything has gone up in price. For example an average dress used to cost about 8sd’s, it is now 22sd’s. We are still getting the same amount when we buy stardollars that we bought before everything went up in price.
    It has also become so hard to get stardollars if you can’t buy them. A lot of the surveys that we used to be able to do in exchange for stardollars are now gone. One of the other methods to get stardollars for free is downloading apps like Babylon, the only problem is all of these download offers give you viruses. I downloaded an app 3 years ago. It gave me malware so bad I had to take my computer into the computer store to get it fixed.
    Also the security needs to be upgraded urgently. I know a lot of people who were hacked recently and NONE of them gave out their password. I’m afraid to buy more stardollars because I’m afraid I’ll be hacked.
    The average dedicated players are NOT 8 to 15, they are 16 to 25. I myself am 22. Yet they still have lots of promotions for young girls like Barbie stores and gifts. To the dedicated players whom are all older than 16 it is annoying.

  • Keksinda Ubageaceit


  • Fernanda Stardoll


  • Meg

    I honestly don’t think many people realize just how many 50+ members there are. Yes I am 57 and I play daily, as do many of my friends. We come to relax and de-stress from the realities of real life. Unfortunately of late it has become very stressful to be on Stardoll. We spend a lot of money to play and we are harassed and badgered by some members. Many of my friends are part of “Callies Crew” and even they are no longer safe from people “cloning” their dolls and causing trouble in the chat parties. But even when we write and shoe screen shots we are told everything is fine and the dolls are safe. But the pictures show different. There are people who are hacking into this website and it seems that every weekend someone else is a target. It has nothing to do with giving out passwords, just about everyone member knows not to do that but we are told that every time we contact the company, that is part of the stock answers we get no matter what our concern or issue is. Do they really believe they have over 400 million players?? No what they have is a couple of hundred million fake accounts that have been made over the years to get over on the company for one reason or another. The hot designers, just about every single one of the nine in each category cheat, and the company has be told repeatedly but they do nothing about it. They use the members as workers to report others, but what do we get in return…nothing. We don’t get a paycheck, and half the time after we make a report nothing is done, the same cheater is back doing the same thing. I refuse to waste my time working for a company that doesn’t do anything for me in return. I was asked by Mr. Miksche on Twitter to email him directly with my concerns, I was happy to and sent him an email and included some screen shots for him to see what was going on in certain areas but he never bothered to even acknowledge that he received my email let alone respond. I don’t believe that this company cares much about their members, or shall I say investors because that is what we truly are. When someone puts real money into a company they become an investor, I have an invested interest in this company and should they go belly up like so many others, we lose everything! In the meantime they have gotten wealthy while we are now cash poor. The will have money in the bank but the doll I have paid for will be gone in a flash and everything I paid for will be gone with her. It’s happened before, Yoville, Farmville, Sorority Live, just to name a few. If nothing else they should pay closer attention to their paying members and not treat us as though we are a bunch of idiots handing our passwords out willy nilly. Stop giving us stock answers when we are having an issue, whether it be technical or otherwise. We all know about the importance of cleaning our cache, mostly everyone who plays any game with the amount of graphics as this understands the importance of keeping our systems in good running order. Sometimes I honestly don’t believe they really read and or understand what we are writing them. Communication is very important and the lack of communication that we receive is extremely frustrating. I hope someone will actually take the time to read our comments and take us seriously. We are losing valuable members every day. I am now at level 94 and if I don’t see a change by the time I hit level 100 I’ve decided to leave Stardoll and put my money to better use. We are your future!

    • w.ange1

      whats your sd name

      • Meg

        May I ask why you want to know my SD name? Not trying to be rude, just curious…

        • w.ange1

          i want to see your suite and doll 😀

          • Meg

            sorry but I’m going to pass.

          • w.ange1

            okay XD

          • Meg

            I prefer not to put my SD name on here if that’s okay with you. I hope you understand.

          • w.ange1

            yeah its ok if you dont want to 😀

          • w.ange1

            i just want to visit you thats all :)

  • Thanks to the 10 celebration, you have lost even more loyal and dedicated players. We love the old game and stay hoping that it will get better, but it is going in the wrong direction. We are not cash cows. We don’t mind paying for a fun game, but the fun is being sucked out of SD, with everything only being about money for you.

    Please go back to what you once were. Read these comments and the comments in the Royalty Club discussion, before we lose even more players.

  • abby

    I was a player on this site by name chicabby , initially I loved it clothes were worth buying we had the sc to sd converter , limited edition clothes use to come on time and overall less pricey things were and there was catwalk but now it’s boring and expensive try winning cover girl u end up spending cash and win nothing so I lost interest in the game left it last August and honestly very relieved and happy and saved tht money into buying clothes in real life and got loads of time to do other things in life and found Kim kardashian game and stardom Hollywood game as the best alternative to play sometimes , I spent about 25000 rupees on it played for about 4 years , they never valued me neither did I get anything much in return for spending so much

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