March, 2020 - (4 years old)
Monthly Net Profit
This 30M cash offering (50M including options) is for a growing WHO-sponsored mental health game (IOS + Google app native) that has 3M+ users (mostly adults in Europe/USA) and more than 10M in yearly revenue and tremendous growth opportunities.
ABOUT THE BUSINESS
This business is a one-of-a-kind game that has been designed to improve the well-being of its (mostly adult) users. The game is set on a virtual farm, where players can engage in a variety of activities that are aimed at reducing stress and promoting relaxation. The game has been developed by a team of experts who have combined their knowledge of game development and psychology to create a product that has the potential to revolutionize the gaming industry.
The big opportunity being sold with this business is a high quality user base of 3M people (in USA, UK, Germany, Australia and more) who use this application to better their mental heath whilst generating 10M+ in revenue a year to the app owner. With the rise of mental health issues, more and more people are turning to alternative therapies, such as mindfulness and meditation, to help them cope with stress and anxiety. The game offers a unique and engaging way to practice mindfulness and relaxation techniques, making it an attractive investment for those who are looking to capitalize on this trend. Unlike other games that target kids (who don’t have their own money to spend), this game targets adult consumers, who have the income level to make them highly valued targets for advertisers.
Through its model, the game generates revenue through in-game purchases, advertising and subscription models but it’s current 10M in revenue is miniscule compared to what it could be once it is optimized . As the game continues to gain popularity, there will be opportunities to expand the product line and create new revenue streams, making it a good investment for those looking for long-term growth opportunities. Overall, the game is a unique and innovative product that has the potential to revolutionize the gaming industry while also promoting mental health and well-being. With its combination of engaging gameplay and mindfulness techniques, it has the potential to appeal to a wide range of consumers and generate significant revenue in the process.
Through this offering, you have the opportunity to acquire this business with the full team in place for 30M cash - to ensure the owner stays on to grow the business with you, you need to add 20M of incentives (4M a year for 5 years) to ensure the full success of the business.
3-year-old mental health gaming business (app-run) with World Health Organization partnership
The game boasts over 3M users with 79,100 reviews on Google Play store at 4.5/5 stars and 20,800 reviews in the Apple App Store at 4.6/5 stars
$8,967,282 in revenue for 2022 with at least $12,000,000+ expected for 2023
Business is being offered as a turn-key M&A opportunity (with full team in place) so that it can be bought by a private equity fund or strategy buyer that will be able to take it to the next level.
The business is in the gaming market, specifically in the casual games niche. This market segment includes games that are easy to play, require minimal time commitment, and have broad appeal across different age groups and demographics. The game is designed to serve a community of individuals who are interested in improving their mental health and wellbeing through engaging and interactive gameplay.
The casual games niche is a rapidly growing segment within the gaming industry, with an increasing number of players seeking out games that offer a quick and fun distraction from daily life. These games are often accessible across multiple platforms, including mobile devices and social media, and offer a low barrier to entry for players who may not consider themselves traditional gamers.
The community that the business serves includes individuals who are interested in mindfulness, relaxation techniques, and self-care. This community is made up of people from all walks of life who are looking for ways to improve their mental health and wellbeing, and who value the convenience and accessibility of digital products. The game offers a unique twist on the traditional farm adventure game by incorporating mindfulness and relaxation techniques into the gameplay.
In addition, as someone who is already familiar with the farm adventure genre, the user may be more likely to appreciate the innovative gameplay and storyline that the game offers. This could help to increase their engagement with the game and keep them coming back for more.
In the broader context of the casual games niche, the game is well positioned to appeal to a growing market of players who are seeking out games that offer more than just entertainment. With an increasing focus on mental health and wellness, there is a significant opportunity for games that offer players a way to destress and unwind while also promoting mindfulness and self-care.
The game has already achieved over 3,161,000+ installs worldwide via major app outlets like the Apple App Store and the Google Play Store.
The customer base of the business consist of individuals (primarily from western nations) who are interested in casual games and are also seeking to improve their mental health and wellbeing. About 85% of users are female and 15% are male while the average age of users is 25-35+.
In this, the game successfully operates in several top geos, including the United States, United Kingdom, Canada, Australia, and Germany although the app has gotten some success in France, Brazil, and India.
Key partners for user acquisition for the game include AdMob, Unity Ads+IS, Liftoff+Vungle, Apple and AppLovin. Major partner is Unity Ads+IS.
3.1M+ app downloads generate 60k+ daily active users (DAU) and 360k monthly active users (MAU) who made 85 million sessions last year (currently about 10 million per month) with 2.5 sessions per user per day.
The game makes money through various revenue streams, including:
In-app purchases: Players can purchase virtual items such as coins and gems that can be used to buy in-game items, unlock new features, or progress through the game faster. Prices for these items range from $9.99 to $99.99.
Advertising: The game features ads that players can watch to earn rewards such as gems.
Subscription: The game may offer a weekly subscription. These subscriptions can vary in price from $4.99 to $9.99 per week, depending on the level of content and benefits provided.
Brand integration: The game may integrate branding or advertising from other companies into the game, such as featuring branded virtual items or creating sponsored events or challenges. These partnerships can generate revenue for the game through licensing fees or revenue-sharing agreements with the partner company.
Overall, the game offers multiple revenue streams that allow the business to generate revenue from both paying customers and advertisers. The game's various pricing models and revenue streams are designed to appeal to a wide range of players, from those who prefer to play for free and watch ads to those who are willing to pay for virtual items or an ad-free experience. There are many other ways for the business to generate revenue as it continues to grow - the next owner can dive deeper into what those are with the help of the current management team.
2021 - $1,898,077
2022 - $8,967,282
2023 (January - March) - $2,798,605
2021 - ($1,172,505)
2022 - $1,179,726
2023 (January - March) - ($22,186)
The customers for the business come from various sources.
Organic Search: Some users may discover the game through search engines like Google, AppStore and GooglePlay.
Social Media: The game has a strong social media presence with active accounts on platforms such as Facebook and Instagram. Some users may discover the game through these channels, and the business would not be paying for any advertising.
Paid User Acquisition: The business may be paying for advertising on platforms such as Unity, Liftoff, Applovin, Facebook, Google, or other ad networks to acquire new users.
Overall, the customers for the game come from a mix of organic and paid sources. The business may be paying for advertising costs for in-game ads or user acquisition campaigns on various ad networks. However, the game's strong social media presence and organic search traffic also contribute to customer acquisition without any advertising costs.
Ad networks: The game uses various ad networks to generate revenue through advertising, including Google and Unity Ads and others.
Social media platforms: The game has an active presence on social media platforms like Facebook and Instagram, where it promotes the game and engages with its user base.
Mobile app stores: The game is available for download on both the Apple App Store and Google Play Store, which serve as major distribution channels for the game.
Hosting providers: The game is hosted on servers provided by AWS, a web hosting company.
Analytics providers: The game uses analytics tools such as Google Analytics and Firebase to track user behavior and measure the game's performance. The company also uses Appsflyer as MMP.
Overall, these third-party companies play a critical role in the game business, providing services that help generate revenue, drive user acquisition, and track key performance metrics.
The biggest expense for the business is the promotion of the game, which includes various forms of advertising such as mobile ads, social media ads, and influencer marketing. Other expenses include hosting and server maintenance costs, as well as ongoing development and updates to the game. Additionally, there may be costs associated with third-party services such as payment processing, customer support, and analytics tools. Employee costs are also a factor that fluctuates but right now it is around USD$250,000 per month. Over the last few months, advertising fees have been 50-75% of revenue as it is an investment into growth. If investments into growth were curbed, profit amounts would soar.
The valuation of the game is determined to be $50M based on its revenue, growth potential, assets, and market conditions. The ultimate value of the game lies in its ability to attract and reliant players at very profitable metrics and these users being in a lucrative demographic. The game is able to generate approximately 30% profitability on every single dollar invested into ad spend. Currently the game is looking at $10 million in sales for 2023 with the potential to bring this value up to $22 million in 2024. The company’s valuation of $50 million is based on 5x of the current range of $10 million revenue and we believe that the multiple is a fair multiple to use given the revenue projections, user acquisition, and gross profit margins of this company.
On average the company spends around $3.74 per install and has built up the install base to over 3 million users. An average paying daily active user generates around $20 in sales. Currently the game has over 60k DAU and over 300k MAU, having generated USD$1.0M+ in sales in March 2023. While metrics vary day to day, management is comfortable with their ability to continue in improving their acquisition and monetization strategy over the coming months. At the moment, the operating assumptions based on the past year are that it costs on average $4 to acquire an install and each install generates on average $6 in the first year. It currently takes about 3-6 months to recover acquisition cost and a typical profit sits around 30% of the ad spend.
Currently, the game ranks #89 for adventure games in the Apple app store while it ranks #14 for top grossing adventure game on the Google Play store.
BARRIERS TO ENTRY
Starting a mobile game business like this game from scratch requires more than just money and time. Here are some potential barriers to entry that a potential buyer may face:
Technical expertise: Developing a mobile game requires technical expertise in software development, programming, and game design. A potential buyer may need to hire a team of developers, designers, and testers to build a game from scratch.
Competition: The mobile gaming market is highly competitive, with many established players and new entrants vying for users' attention. A potential buyer may find it difficult to stand out from the competition and attract a large user base.
Brand recognition: The game has built a strong brand and loyal user base over time. A potential buyer starting from scratch would need to invest time and resources in building brand recognition and developing a user base.
Marketing and advertising: Promoting a mobile game requires a significant investment in marketing and advertising to reach a wide audience. A potential buyer may need to spend a significant amount of money to compete with other games in the market.
Legal and regulatory compliance: Developing and operating a mobile game business involves compliance with various legal and regulatory requirements, such as privacy laws, terms of service, and intellectual property rights. A potential buyer may need to hire legal experts to ensure compliance with these requirements.
Overall, starting a mobile game business from scratch involves significant risks, challenges, and costs. The game's established brand, loyal user base, and proven revenue streams may make it a more attractive investment for a potential buyer.
March, 2020 - (4 years old)
The following are included in the sale of this business:
Expansion Opportunities for New Owner
The new investing for the game could consider expanding the business by:
Adding new features and content to the game to keep players engaged and attract new players.
Developing partnerships with other companies or brands to cross-promote products and services.
Offering in-game sales or discounts to incentivize players to make purchases.
Increasing the game's marketing efforts through paid advertising or influencer partnerships.
Exploring new markets or geographies to expand the game's reach.
Leveraging user data and analytics to make informed business decisions and optimize the game's performance.
Overall, the new owner of the business will need to focus on both retaining existing players and attracting new ones in order to grow the business and increase revenue. This can be achieved through a combination of product development, increasing marketing budgets and efforts, and strategic partnerships.
It depends on the terms negotiated between the seller and the buyer but generally, post-sale support can include assistance with the transition of ownership, training on software and processes, and answering any questions the new owner may have. The length of time the seller stays on board and their responsibilities can also vary depending on the agreement reached between the parties but it is to be assumed to be at least 60-90 days at the current asking price (although much longer periods can be up for negotiation).
In some cases, the seller may stay on board for a few months or years to ensure a smooth transition, while in other cases they may not have any ongoing involvement. It is important for the buyer to discuss post-sale support with the seller and clearly define expectations in the sale agreement.
The owner has decided to sell the business for personal reasons, but they believe that now is a good time for a new buyer to take over and grow the business further. The business has a strong track record of profitability and growth, and there are many opportunities for expansion and diversification. The timing makes sense for the new buyer because they will be able to take advantage of the current market conditions and continue to build on the success of the business. The owner is committed to a smooth and seamless transition, and is willing to provide support and guidance to ensure the new buyer's success.
The ideal buyer for this business would be someone who has experience in the mobile gaming industry and is passionate about developing and promoting mobile games. They should have the financial resources to invest in the business and take it to the next level.
In an ideal world, the perfect buyer would be a well-established game development or publishing company looking to expand their portfolio and acquire a successful mobile game with a strong user base and proven revenue stream.
That said, the business has already been approached by many different private equity funds with interest in the concept but the ROI model likely makes the most sense for a gaming company with the established audience, operations, and capital that can take scale this game to a level 10x the current revenue level.