Feb 15 Mind Candy, which made its name with online kids game "Moshi Monsters", is making a major push in the United States as the British exporter seeks to make money in the world's largest consumer market ahead of a potential initial public offering, its chief executive told Reuters.
"We can't stay necessarily stay private forever. We have a lot of shareholders and we don't want to sell. Going public at some point is the smartest way forward," Chief Executive Michael Acton Smith said in a recent interview.
This year would be too early for an IPO but it could be in the "next few years," he said.
The company's sole franchise "Moshi Monsters" is targeted at children ages 6 to 11. About 60 million users globally have signed up to raise virtual monster pets in the game.
Based in London, Mind Candy is the latest company to start out as an online video game maker and then try to become a merchandising powerhouse, on the heels of Rovio, which makes "Angry Birds." Gone are the days when a new kids brand started in a movie or on television, the 37-year-old entrepreneur told Reuters.
As part of the trend, the video game company Rovio now licenses everything from "Angry Birds" plush toys to candy, while Zynga last week signed a licensing deal that would let Hasbro make toys based on the social games company's titles.
Mind Candy's Acton Smith realized nearly two years ago that he wanted the company to do much more than just make games. Under his helm, Mind Candy has signed 100 licensing deals, publishes a magazine and is even in talks to make a movie. The company also has a book deal with Penguin.
Some of its licensing deals are with Mega Bloks and with Activision Blizzard to make a Nintendo DS game.
Acton Smith , who founded the company in 2003, said the company sold $100 million worth of "Moshi Monsters"-related merchandise this year.
In New York for this week's Toy Fair, Acton Smith said he wants to sell more of these products in the United States, where "Moshi" is not yet a household name.
"To build a business with global scale that can go public, we absolutely have to be huge in the U.S. and that's one of the many reasons we want 'Moshi' to take off here," Acton Smith said, adding he is considering moving to the country as well.
Acton Smith pointed to recently public Internet companies such as Zynga, Pandora and LinkedIn as well as Facebook's impending IPO as a sign the IPO market is rebounding.
"The window has been opened this year where it hasn't been in recent years. Investors are understanding there's a huge amount of value in tech businesses," he said.
Acton Smith said his 100-person company will double its staff this year. The company raised a second series of funding in 2010 and may consider raising another round of funding to put more cash on the balance sheet or finance acquisitions.
Last summer, the company was valued at $200 million but now "our valuation is now substantially higher than that," Acton Smith said, declining to shed more light on the current valuation.
For now, the company is trying to diversify away from its only brand by developing two new games it can market to the same audience of kids who like "Moshi Monsters" as well as building a YouTube-like video website called "Moshi TV."
"Our big bet at Mind Candy is the future of entertainment properties, particularly kids properties, will originate digitally," he said.