Session: Investor’s Perspective – What Matters While Considering An Investment Within Mobile...

[Music] uh we're now moving on to show me the money which is um starting off with Samuel Heber and mat mazinsky from aquinox Capital they're going to be talking about Investors perspective what matters while considering an investment within the mobile gaming space so yeah nice event thank you everyone for uh for being here right I think it's a good conversations um now I guess a little bit of different topic right very technical right now I think here we go a bit more high level so it's more about the investment side um but before we start just quick introductions right um

let me see if that works yeah perfect so my name is Samuel Heber um from Switzerland Swiss based and um my background is pretty much Investment Management right worked in uh m&a for many years and then work through ladders and uh worked for some of these companies and um now I'm managing director of aquinox and uh we basically do two things on one side we do merg Acquisitions Consulting and on the other side we we do Investments and we'll get to that in a minute so now please MOS right thank you um hi everyone so my name is Mos musinski and I'm investment associate at aquinox Capital um uh actually before joining the team back in 2023 uh my career was mainly concentrated around uh uh m&a advisory practice uh I worked for one of the big four companies eyi at waru office uh where I was involved in dozens of different MMA transactions across the

sea region but every every transaction was within the TMT space and yeah I guess this is a quick overview of my of my professional background yeah yeah awesome so um yeah today we have uh two topics mainly we want to cover so on one side we want to give you a little background of how we invest right um give you a bit of insight of what we look for and then the second piece is um what do we specifically how do we evaluate Investments right so I think we don't have you know the entire truth or anything like that right I think for us it's it's our approach and for the investors in the room they will all have maybe different approaches um I think this is more given you know some of the startups uh in the industry bit guidance of how we look at things right so um you want to start y of course right so to give you just a quick overview of uh of our operations uh

aquinox capital is a Luxembourg based private Equity Fund um where we deploy Capital through through of our primary um investment arms uh the first one is the securitization fund and the second one is quantum Tech growth fund uh which is actually a traditional private private Equity Venture Capital fund uh focused on mobile gaming industry and that part will be probably more relevant during today's presentation so we're going to um invest a bit more time into to it uh starting however with the securitization fund uh we follow a deal by deal uh deal by deal Co investment model uh which is actually a growing Trend within the private Equity space nowadays uh it means that instead of raising uh Capital up front we do the fundraising on adhoc basis whenever some competing uh investment opportunities arise we then Syndicate those to a closed network of our investors um and this is actually how how how this goes um yeah uh what can I

not uh we are Tech agnostic meaning uh we are open to any kind of uh business models or verticals that can be identified under the general Tech umbrella um we are also kind of flexible in terms of U in terms of the stage of the development uh starting from uh uh supporting uh supporting uh growth equity for smaller Ventures through pre-ipo opportunities and even uh uh buyouts of more mature companies uh um and yeah you can see a bunch of uh a bunch of our portfolio companies on the securization side on on the left bottom of the slide then on the other hand we have 10 Quantum Tech growth fund so like mentioned before uh a pevc fund uh with a with a clear mandate to invest across the whole value chain of mobile gaming industry or in other words uh we're talking about the vertical integration of gaming uh basically here um yeah uh we are following kind of a dual strategy

meaning we can do both minority and majority Stakes uh targeting growth equity and and bio stages as well uh typically ticket sizes starts with uh 250k Euro and going upwards uh along with the stage of the development of of giv company and yeah uh here as well on the bottom of the slide you can see a bunch of our portfolio companies we are going to delve into more detail uh to a selection of those shortly oh great uh right so to give you uh I mean to elaborate a bit further uh on quantum's investment strategy uh on the top of the slide you can you can see a sentence that probably summarizes in the best way possible so we aim to invest in companies engage in value creation and value distribution of gaming products with established Revenue model um uh so in order to like uh give you more context we we try to visualize uh and and maybe even decompose the whole

industry into uh verticals that are of our interest um those logos presented in here are not necessarily our Target companies they were just placed in here to to give you more sense of you know what kind of business models we are talking about or we are thinking about when investing so yeah starting with gaming Studios right through Publishers player management tools monetization tools uh then ending with you know all kind of gaming soures or you know any kind of gaming game distribution you can you can imagine through cloud gaming and even Network optimization right uh and to add something on top we've also tried to identify like a bunch of General uh criteria for our investments you can see them listed on the on the right right hand side um so yeah starting with the obvious uh unique and uh unique uh product or service offering right then followed by customer locking or some traction already right on the uh on the top line uh then scalable business model right which is very very important

followed by um established development strategy and uh and the last thing but probably the most important is the seasoned and motivated uh uh management team without which uh you know unlocking any potential is is not possible uh great uh yeah so like promised uh right now we're going to uh explore uh three case studies of our portfolio companies just to Showcase maybe the our flexibility in terms of you know different kind of stages of of development we can we can provide support to uh so the first one is blast proof games uh Romanian company uh and this is actually one of our first Investments within mobile uh with did U so uh blast proof uh was uh established in 2018 and the company emerged as a game development Outsourcing agency um serving external and specializing in in

casual General uh I think throughout the journey they they they delivered more than 80 80 high quality games right now we are uh in the process of kind of uh reshaping the business model in order to become U uh a gaming studio uh on its own right full-blown gaming studio creating our own IP casual games um yeah what what can I add um exceptional team and uh yeah a CEO with v experience right and a Clear Vision to how to lead the way hi Alex uh yeah we're just before our first soft lunches so keep your fingers crossed uh then reality games uh this is actually one of our most recent Investments um so reality is a uh development Studio from Poland that specializes in AR geolocation based games uh they are they can be known from such titles as landlord go or landlord Tycoon uh currently their biggest project the biggest project is Monopoly

go uh so they they have just secured the IP from Hasbro to to develop it uh right and Monopoly world right Monopoly world sorry yeah sorry uh I'm stressed excuse me uh right uh so actually uh this is something more than just a mobile game right uh uh I mean U the project actually involves uh some metav ver features hopefully this is not a buzz word anymore uh but yeah I mean you have AR you have real life buildings which you can buy and basically dispose to other players uh all Guided by Mr Monopoly then you have another component which is basically connecting players uh or or users to uh to brands in the offline world right uh through some Partnerships and this is actually uh a monetization channel which is not that very common in in the space right so yeah I just wanted to highlight that this is this is something more than than just a mobile game right and uh yeah we believe that m given their track record

right in geolocation based games uh globally recognized IP um Diversified Revenue model and passion driven CEO this this game I mean this this this company has huge huge potential and yeah the last the the last one is epic games so probably a company that does does not necessarily needs any introductions right this is rather a passive investment from from our end uh yeah however what brought our attention to to to Epic was the the comprehensive and complimentary business model right that basically covers uh uh different area areas of the of the whole value chain right so value creation value distribution um yeah and we also really like what they are trying to achieve in the mobile right now so yeah I guess this is this is a quick overview of our portfolio good yeah thank you very much so um so this is very specific right um and I think we also want to talk a little bit more General right for I

think some of you um that are are building a business and I think overall we can probably categorize them by six sub categories um on on things we look at so number one we look at the team then uh we look at the business model you know what exactly you're trying to achieve uh how do you make money and so on and then number three is the IP is there IP being created right there different types of ips we'll get into that in a moment um and then third is kind of like the financial and operational efficiency or kind of how is it you know like the finance ultimately is always relevant and then kind of what money was raised in the past and how has that been used and as last you know who is on the cap table that's uh also relevant so okay these um six pillars so let's get into each one of them in a little bit more detail so first of all leadership and team right and I think mat has highlighted it um with blast

proof right I mean there for us very clear leadership strong team right and for us that was was was a key uh differentiator um the the the team needs to be able to sustain let's say the highs and the lows and I think that's the challenge when you when you have a startup right because initially it's all honky Dory but then over time right there will be uh challenges and going through the challenges you need to have a strong team which is well Diversified also with technical skills as well as um let's say a soft skills and business-wise um that's important and then also where does the team come from have they been in the in this gaming industry before or are they coming in on the side um obviously the more experienced the better right and uh I mean the best of the cas is if uh someone already had an exit before so they they know all the stages of developing a business up until exit um so I think these are the key things

right and then just having the right talent in the team so then number two um we go to to business model so the um the business model I think uh there's you know we're talking about Mobile gaming here so the obvious thing is like you're looking at games is it one game is it multiple game do you launch a game per month or one per year or one per two years right but uh we also look at business model which have nothing to do directly with a game right it could be on the back end it could be some software which is actually the shovels right when you look at the the the gold digging uh atmosphere it's also very relevant right to have the right um infrastructure and uh we also look at businesses that do that right um and then there's different type ways of of of making money right um so we look at businesses that do uh advertisement only um but there's also uh a very good option of you know having combined or having Ina purchase and so on it all depends how scalable is it so I think

for us this is a key requirement right we we don't want to invest in businesses who only do like um work for higher ultimately needs to be a business model which we believe is scalable and that makes will make sense for us um what else is to uh to mention on this point here I think uh overall probably like a a clear plan on how you want to further develop it and uh how you go out to the market also I mean we've been at this uh two days right we hear a lot about industry Trends um I think it would be important right that uh the business kind of is aligned with the industry Trends number three intellectual property and I think um this is uh is good when the business you know build some property some intellectual property but it can be different types of Ip it could be on the back end as well just how do you collect the data how do you analyze the data but it could also be a specific game play so there's uh very

different uh uh ways of that number four is the the financials um I mean for us and I don't think that goes for all um investors but we typically look at businesses that already make money doesn't have to be profitable but they do have um some Revenue metrics which kind of helps us to understand the the the the business the reality is I mean everyone has the best game right everyone has the most beautiful game and for us it's very difficult to assess right if it's a breakthrough or not once we do see some numbers uh for us it become becomes much more easier to to assess and um there we obviously look at break even points but even before that we look at you know what is the daily active users and what monthly active users and so on I think the trends are relevant right it's not absolute number but it's kind of what trend is it and um how how does the team also deal with that and do you have a good explanation for all of the

data then of course like um how how is the Opex being distributed um how's the how's the money being used right is it um is it all outsourced is it all insourced do you spend a lot of money on offices or distributed model I'm not saying one thing is better than the other but I but we obviously look at it and try to understand what is the rationale behind it some teams prefer to have a very close team everyone in the same office which absolutely can make sense you other cases it can make sense to have a complete distributed model but these are all uh has direct impact on the on the finance of course so yeah so I think these are the the key points right I mean we have five more minutes left so I don't want to go into too much detail on that I could we could spend hours on this I think Finance is important but at the the earlier stage the less um it is actually it can tell us something number five um we have um Capital raised in you know how much money has been raised in the past and

how has it been used so uh we look at uh let's say they received 1.5 million and they had a specific plan you know what did they stick to the plan um what was achieved during that during that time and um and for us also I mean it can be actually an advantage if they pivoted right so it's not only like you have a plan and you absolutely stick to the plan but you you know I I want to go in this into this wall and I did go into this wall right so I mean if you understand that your plan is not working out then you're pivoting and I think that shows the strength of the team so um so it's again it's not about the absolute but it's understanding have they been able to raise how have they used the capital and um and what is the what is the what is the burn rate right so if we see like they have a significant burn rate they ask for a specific amount we already know that in in 2 3 months they'll need to raise another Capital you know potentially it's a problem right so we want to

understand what is the burn rate um so we can uh also assess how much uh money we can put in or have to put in so yeah um I think these are the key points uh on that and then further on I think the cap table so typically you have a founding team you have a probably CEO CFO or typically not a CFO at that stage but for sure like some product guy right and um and there needs to be some distribution of equity among those people um so the we don't you we don't want to see debt Equity so basically you don't want to have um people either are investors or they are working for the business but you don't want to have people that are not working for the business nor are the investors and their shareholders so I think that's uh that's a potential problem right if you have Deb Equity um but even beyond that I mean given our size we're not a massive team so if we see other players in the game that are in gaming space and have invested um we know that they're well

guided you know the company has a good you know Advisory board or whatever that is supporting the company that also gives us Comfort when we invest so I think when you're looking for investors also make sure that you have um companies within the same space um that are kind of seen as Leaders um investing into your company that's seen positively um also what kind of incentives do people have right to further grow the business right um stock options whatever like these are all kind of things we look at yeah I think these are the key points um regarding that um do you want to add anything no good so yeah we have like two minutes more two minutes left um if there's any questions we're happy to take them please do you all invest in American companies yeah do you invest in us-based companies as well um so yeah I mean we're not uh specific

to to a region we're quite open um we I mean we actually do have uh us companies in our portfolio right um I mean epic games obviously is a US company right so we're uh we're quite open to that um I mean always depends kind of what area look at but we're not against us yeah for sure thank you very much [Applause]