It is a well-trodden path. Tech start-up is founded by 20-something graduate. Company rockets to success. A few years later, it is bought or floats for an eye-watering sum, never mind that it has never made a profit.
But last week Facebook's attention alighted on a technology business cast from a rather different mould. Tucked away in Soho's narrow streets is King.com, a decade-old enterprise which the social network has suddenly hailed as "the poster child for the fast-growing European games industry". King.com produces addictive games such as Bubblewitch Saga and Pool King , which appeal to so-called "casual players" who want something to entertain them on the move.
Play is free, but users can gain "game advantages", such as extra "lives", by paying for them accepting advertising. The games can be played on multiple different platforms but have lately been gaining traction on Facebook.
Three of the seven games that King.com has released on the social network so far have made it into the top 10 of the most played games on the social network. The biggest, Candy Crush Saga , is played 55m times a day and has knocked King.com's major rival, Zynga (NasdaqGS: ZNGA - news) , off the top of the chart.
No wonder Facebook is taking notice. Its founder, Mark Zuckerberg a man now charging $100 just to deliver a message to his inbox recently enjoyed a private dinner with King.com's executives. Suddenly, the American technology industry is feting King.com as if it were the newest, brightest kid on the block.
But far from being a shiny new start-up, King.com has its roots in the 1999 dotcom boom. Riccardo Zacconi, the urbane Italian at its helm, met its co-founders when he was chief executive of the German unit of a fledgling news, search and email portal called Spray. They hoped to make an initial public offering in March 2000 but the dotcom bubble burst and put paid to their plans. Instead of floating, they sold for considerably less than they had hoped. The so-called "fold friends" as Zacconi refers to them given that Spray all but folded dusted themselves off and, three years later, founded King.com. Zuckerberg would not launch his social network for another year.
The idea was to specialise in games that could be played on Yahoo (NasdaqGS: YHOO - news) !, which was still riding high as one of the most popular portals on the web. Zacconi and his co-founders, King.com's chief creative officer Sebastian Knutsson, chief technical officer Thomas Hartwig, studio chief Lars Markgren and developer Patrik Stymne, poured their money into the project, chasing after serious gamers.
A few heart-stopping moments occurred along the way, where the business almost ran out of cash. Zacconi recalls one Christmas Eve when the fax machine got stuck as it cranked out an investment contract that was the difference between the company going bankrupt or keeping it afloat. It shows his age. At 46, Zacconi might be young for the average chief executive, but he is a relative grandfather in the ever-more youthful world of technology.
These experiences have served Zacconi and King.com well, however. The company moved into profit in 2005 and has stayed firmly in the black ever since, exercising discipline over its spending in a manner not usually associated with rapidly-growing technology businesses. "The dotcom crash was a wake-up call. It was not a very pleasant experience but it was very rich. We learnt that you have got to think long-term and stick to healthy economic principles," he says.
Even with a conservative balance sheet, King.com has managed to expand pretty rapidly. Last year, with backing from private equity firms Apax and Index, it opened new offices in Bucharest and Barcelona, and took on heavyweight executives from Zynga and Electronic Arts (NasdaqGS: EA - news) .
This year it plans to nearly double its workforce from just shy of 400 people to 700. Although King.com has offices in San Francisco, Zacconi favours hiring across Europe, where it also has offices in Malta, and Stockholm and Malmo in Sweden. "A lot of fantastic talent is here. Also, there is better [staff] retention in general. In the Valley, there is a lot of hopping around to the newest hot thing."
Meanwhile, King.com's fan base has been growing fast, he adds. Some 5bn people play its games each month, up from 1bn a year ago helped in part by soaring mobile usage.
"There is something really dramatic happening in the way users consume content," says Zacconi. Increasingly, they are after "snackable" entertainment that they can dip in and out of.
King.com has taken full advantage of this trend by ensuring that users can start playing games on one device, for example a PC, and pick up at exactly the same point in the game on another device later on. It sounds an obvious step, but it is complex to deliver and King.com was one of the first in its field to do so.
Zacconi will not reveal how this translates to King.com's balance sheet, but the company's growth trajectory is exceeding even its own expectations, he claims. "The company is growing explosively. We are continuously reforecasting upwards. We already have to increase the target which we upped in December." Revenues are thought to have quadrupled from around €100m (£84m) 12 months ago.
Investors have heard these sorts of boasts before, however, not least from Zynga, to which King.com is regularly compared. The San Francisco company shot to fame with so-called "resource management" games such as Farmville , which seemingly produced money from thin air by persuading players to part with their real-world dollars in order to buy virtual-world goods, such as livestock and animal feed.
The business was widely regarded as one of the hottest technology start-ups in the world until December 2011, when it went public and saw its value plummet. Investors weren't quite as happy as Farmville devotees to pump their money into the business and it has been forced to radically scale back since.
Zacconi, who was once happy for King.com to be billed as "Britain's answer to Zynga", is adamant that it will not match its downward path. For starters, the two companies create games in entirely different ways, he says.
While Zynga assigns hundreds of staff to new projects, King.com launches a new game on its website every month, each created by just three or so developers in three months. It then uses this as a test bed to decide which ones it should invest in further. "If a game doesn't work, it fails fast and cheap," Zacconi says. The testing process also helps the company to avoid backing the wrong horse. "We are doing something that no one else can do, which is to hit-proof a hit-driven business."
Many technology-watchers will also be wary of King.com's new love-in with Facebook. Zynga used to be one of the social network's greatest allies, but has found itself increasingly cast out into the cold in recent months. From March, its players will no longer automatically be able to share their progress on Facebook.
Zynga's experience has left some analysts deeply sceptical. "Any business based on Facebook games, especially of this sort, is doomed," says one.
Perhaps mindful of this, Zacconi does his best to downplay the relationship.
Facebook's fondness of King.com has "zero" impact on his business, he says. "We work very closely with them on experimenting, testing features and pushing boundaries, but the features are available to everyone. Facebook is a neutral platform."
All of this sounds suspiciously like paving the way for a King.com flotation.
Certainly, Zacconi said last year that the company was looking at a 2013 initial public offering (IPO) on America's Nasdaq stock exchange. "If we execute well, [that is] what we have put on the agenda," he said at the time.
Seven months on, he appears considerably more circumspect. "It is difficult to say [whether we will float this year]. It depends whether the markets are ready but we have not decided to do an IPO," he says coyly.
The focus for the moment is to scale up and "execute really well", Zacconi says. "I hope we are not just the poster child for European success. I hope we can be the poster child for tech success full stop."
= RICCARDO ZACCONI CV =
Family Lives in London with his Chinese-Swedish wife and son
Education Studied economics at LUISS University, Rome
Career 1993 Management consultant at Boston Consulting Group; 1999 joined Spray; 2003 launched King.com