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.”