Case study

SEVEN’s growth boosted by acquisition of Finnish IT company

American mobile messaging company entered European and Asian markets via Finland.

Founded in 2000, the American company SEVEN is now one of the world’s leading mobile messaging companies, whose popular email application is currently offered in over 60 countries by more than 130 mobile operators and Internet email service providers.

 

In 2005, SEVEN strategically entered the European and Asian markets through the acquisition of Smartner, a pioneering Finnish company which had been developing mobile email solutions since 1999. Following the acquisition, SEVEN’s office in Helsinki has continued to thrive as the company has maintained its rapid growth curve.

 

As one of the co-founders of Smartner and now SEVEN’s Vice President, Customer Services, Mika Uusitalo believes both the Finnish and American companies gained a great deal through the acquisition. “By 2005 Smartner had already become the market leader in the European and Asian mobile email markets, selling its mobile messaging technology to more than 50 operators,” says Uusitalo. Smartner’s success was based on advanced technological know-how with user experience as its central concern, combined with a major marketing effort in both Europe and Asia.

 

As a result, the acquisition of Smartner provided an excellent way for SEVEN to enter the European and Asian mobile messaging markets. “SEVEN benefited from Smartner’s business expertise and customer base in these markets, which can be very different to the American market. For example, in Europe the market can vary greatly from country to country because of language and cultural differences. Smartner’s experience enabled SEVEN to enter markets where several American messaging companies had already failed,” explains Uusitalo.


By the time SEVEN showed interest in the acquisition, Smartner’s founders had also come to the conclusion that it was impossible for a relatively small Finnish company to break into the highly competitive American market without a major injection of capital. SEVEN’s acquisition of the Finnish company therefore made good business sense for both parties. “The companies were operating similar business models, so it was not difficult to integrate our activities following the merger. We spoke the same language,” says Uusitalo.

 

SEVEN also benefited from the availability of top software developers in Finland. “In Finland the technological know-how is first class and the people are very loyal. They are also innovative and produce good results fast,” says Uusitalo. “There is a lot of core product development taking place in Finland which is also very useful for a company like SEVEN.”

 

Smartner already had a multinational workforce before the acquisition. “At the time there were quite a few international IT developers already stationed in Finland, so right from start Smartner’s employees came from many different nationalities. They didn’t need to speak Finnish, as long as they could communicate in English,” says Uusitalo.

 

The staff at SEVEN’s Helsinki office has almost doubled since the acquisition to almost 60 people. The company’s financial results also tell their own story about SEVEN’s successful expansion to Finland. According to Uusitalo, SEVEN’s turnover has multiplied in the market areas where Smartner used to operate.

 

“The prospects for the future are looking good. We have increased turnover and improved profitability every year. By now it is clear that user friendly messaging services on mobile phones are going to be a big thing,” says Uusitalo confidently, with some justification. This year the SEVEN 7.0 email service was a winner in the Global Mobile Awards 2008 for Best Mobile Messaging Service, with the jury praising its simplicity, widespread compatibility and reliability.

 

SEVEN’s mission is to make mobile messaging available on every mobile phone at an affordable price. “For example, we can do the same kind of email application as on the iPhone for other devices and we are already doing similar things with other manufacturers,” says Uusitalo.