InnoGames exits at a €260m valuation

It’s with enormous pleasure that today we announce another great exit. This time it’s InnoGames – the global developer and publisher of online and browser free-to-play games to media giant MTG , in what we understand to be the most highly valued Software and Games transaction YTD in Germany at a €260m valuation.

You might have not heard of InnoGames (the company and founders were more focused on building the business than attending conferences). It is a company built by three founders from the suburbs of Hamburg, who dropped out of university and used their pocket money to build a globally leading company with over 400 employees and 150m registered players across landmark games like Tribal Wars and Forge of Empires.  They did something similar to Bill Gates or Mark Zuckerberg in quitting school – except that unlike the US not many other people quit school in Hamburg to pursue their entrepreneurial dream; and probably no one does it without any outside funding like the Innogames founders.  The story is not done just yet – after over 10 years of consecutive growth, and now with well north of €100m of revenues and strong profits since Day 1, the company is poised for another phase of scaling with the assistance of MTG.


Since our investment in 2010 it was clear to us that the founding team of Hendrik, Eike and Michael were really talented with a rare combination of great product insight, maturity and ambition.  And we loved the misunderstood market of free-to-play online games where most players play your games for free but the company can scale massively by attracting and retaining a highly committed user base.  Interestingly, in a market where people look at games as passing fads, Tribal Wars has successfully reached its 13th year of operation with close to record revenues.


The journey wasn’t without its challenges and Hendrik and his team showed great foresight in ensuring that InnoGames didn’t end up like many other hobby projects that never scale beyond the original game and the original founding team. Here are the 3 key things the founders did well:


Built a professional board and management team

From day one the founders were clear that they wanted to bring on an investor to help them professionalise the company. InnoGames was profitable and growing fast so the Eight Roads investment wasn’t so much about money as it was about getting InnoGames to build proper structures to scale from 50 to 400 employees.  We were fortunate to attract a great Chairman Gerhard Florin, a seasoned EA executive (who also became chairman of  This constituted a small but efficient board which then went on to bring in a strong exec team from companies like Pro7, Zalando, Jagex and more.  It was this team which helped the company to scale well beyond a typical hobby project.


Committed to mobile while maintaining the browser business cash-cow

Mobile became huge a couple of years after our investment – it was amazing to see pure-play mobile companies like Supercell scaling in the category of strategy games, InnoGames’ bread and butter. But transitioning to mobile wasn’t easy as the contrasts in form-factor, user interface, and distribution channels presented quite a different paradigm.  Over the coming years through carefully planned transition, InnoGames built enough mobile competence to develop a top 20 mobile game – Forge of Empires.  However, InnoGames never strayed far from its browser business which today is a major contributor of both revenue and profits.  It has enabled the company to invest heavily in mobile, well beyond what some start-ups can afford through venture capital funding.


Created a product focus that helped company stay ahead of the competition

It is a bit of a cliché these days, but InnoGames is indeed a true product company. When we invested they had 3 successful games and have since added a few more to the list.  They relentlessly focused on optimising the funnel, churn, and playing experiences, while improved monetisation was a nice incremental benefit.  It made InnoGames resilient to new entrants, product and platform shifts and when early gaming companies faltered due to lack of product expertise with customer acquisition costs increasing, InnoGames thrived.  Retaining Hendrik as the CEO also helped maintain product passion at the top of the company.


Today, we proudly see InnoGames partner with another successful European company in what will hopefully remain a successful global gaming platform for a long time to come. Thank you Hendrik, Eike, Markus, Michael, Gerhard, Armin, Christian(s), Till and the whole InnoGames team!  Next level unlocked!