Mobile app studio AppXplore lands majority shareholder
Founder Desmond Lee kills two birds with one stone
WHAT this writer had initially assumed to be a poor choice of words – “Keep the company alive” – came alive in jarring fashion when I sat across from Desmond Lee recently.
For while the energetic founder of mobile game studio AppXplore Sdn Bhd had just had his wish granted, and is now looking forward to scaling without worrying about meeting next month’s payroll, he had been living on the edge for the past three years.
Certainly, that is what it must have felt like ever since he launched his startup in 2011 with cofounder Lim Jenn Yu, the creative director and lead game designer.
“We just wanted to build good games that people would enjoy playing, and we enjoy creating,” says Lee.
Though they had an initial investor, after one year of bankrolling the monthly expenses, that investor lost his appetite for the gaming space when AppXplore’s first game met with limited commercial success.
“He said he could make more money from property,” quips Lee. That was in 2012.
With the writing on the wall, Lee leapt into action to look for another investor. He managed to find one, but again the investor was not familiar with the gaming space and agreed to bankroll the business for two years before deciding on making a more meaningful investment.
Warding off the inevitable question here, Lee says, “You have to understand that in 2011, 2012 and even today, there are not many investors familiar with, and interested in, making investments in gaming companies.”
Indeed, earlier this year, despite the company achieving its best success with its fourth and fifth games, Caveboy Escape (pic) and Mobfish Hunter, the second investor also lost interest in the company.
He was less than thrilled with the slow returns, with some games taking up to eight months to create and only generating enough revenue to pay a few months’ worth of payroll. He told them he wanted out.
And so, once again, this time, three years into their journey, Lee and Lim had their backs to the wall.
Chastened by their experiences, this time they vowed to look for a strategic investor. That came through when they recently announced that Fatfish Internet Group Limited, an Internet venture accelerator launched by Malaysians, based in Singapore, and listed in Australia, had taken a 70% stake by buying out their existing investor.
The large stake they had initially given up to their angel investor is unusual, but Lee puts it down to their inexperience, and perhaps gullibility too.
“We were just so intent on building cool games that when we found an investor willing to bankroll us, we eager to get started and did not think too much about our stakes,” he laments.
There are no regrets though for the US-educated Lee, who worked for a few years in the United States, including a stint with a gaming startup in Silicon Valley.
“After graduating with a degree in Computer Art from San Francisco, I went and joined my brother working for navigation company Garmin in Kansas.
“It was interesting and they even offered to sponsor my green card if I signed a bond with them, but I declined because Kansas is a slow-paced city and I wanted to get into Silicon Valley,” he says.
After getting his Valley experience as an art director for the gaming startup, he came back to Malaysia in 2004 and found himself working for five years as a consultant to national ICT custodian Multimedia Development Corporation (MDeC) on its ambitious Saladin animated series.
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