Puzzazz, the Seattle startup founded by puzzle creator and entrepreneur Roy Leban, has raised its first outside funding — about $400,000 in angel investment from an impressive group of technology and games industry veterans.
The company plans to use the funding to accelerate its business of making puzzle books for Amazon.com’s Kindle, and expand to new platforms.
The investor group includes the inventor of “Magic: The Gathering,” Richard Garfield; the technology chief of Intellectual Ventures, Edward Jung; the first employee of Amazon.com, Shel Kaphan; StartPad director and startup vet Mike Koss; and Charles Fitzgerald, the former Microsoft platform strategy chief and current VMWare platform strategist who led the investment in the five-person startup.
Puzzazz makes electronic puzzle books, including variations of Sodoku, that can be solved on the digital page — much like paper puzzle books but with the advantage of being able to ask for hints, have the book remove mistakes, or change the level of difficulty, among other features.
The books sell for $2.99 each.
Leban, a Microsoft veteran who co-founded the Microsoft Puzzlehunt, started the company in 2008. He said his lessons learned from raising the money included confirmation of the old adage: You can’t raise money unless you don’t need it. Revenue at Puzzazz is growing, he said, with a clear path to profitability. But the funding will help Puzzazz speed up its plans.
It was also important to have a solid team already on board, he said.
Also working to the company’s advantage is a strong position in a unique niche. Hundreds of traditional paper puzzle books are available in the U.S. every year. But “right now there are a grand total of three on Kindle, and they’re all from us,” Leban said.
Leban acknowledged that he has not retained majority ownership in Puzzazz following the investment. He explained that he wasn’t focused on his personal stake, but rather on the startup’s success. “If we knock it out of the park and are hugely successful, everyone who contributes will be successful,” he said.
The company’s future plans include products for Google Android and Apple iOS mobile platforms.