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The fairytale story of a $500 million payday

Interview

The fairytale story of a $500 million payday

No one expected that Haim Torpiashvili, who moved to Israel from Georgia at the age of 10 and saw his parents struggle to make ends meet, would achieve a half a billion-dollar exit with his twin brother at the age of 30

Diana Bahur-Nir and Meir Orbach | 09:16  05.09.2021
The luxurious offices of Plarium in Herzliya match nearly every single stereotype about the high tech industry, especially for a gaming company. The giant screens on the office floors flicker with mesmerizing superheroes and imaginary monsters, wild boars clad in armor and alien huntresses depicted with sharp ears and long fangs. A skeleton-like metal robot pointing two upright guns with skulls scattered at his feet, fills the space between the transparent glass rooms. Interspersed among all the workspaces are gaming figures at different stages of development. Everything is in unbelievable overabundance, which has become a well-known symbol of the high tech industry: walls of candy, a kitchen filled to the brim with healthy food, bathrooms equipped with personal toiletries and other personal hygiene effects, all fit for a king.

However, when one enters the offices of Haim Torpiashvili (38), one of Plarium’s four co-founders and CEO, that stereotype shatters in an instant. The room is draped in shades of black, with towering shelves filled with Torah books, including the mystical Zohar, Psalms, and various commentaries on the bible. His desk displays family photos, and the affinity for the Hasidic Chabad movement is prevalent. Those aren’t the luxuries one expects to find in the office of a successful high tech entrepreneur, who sold the gaming company he co-founded for half a billion dollars in cash four years ago.

The co-founders of Plarium at their offices. Photo: CTech The co-founders of Plarium at their offices. Photo: CTech The co-founders of Plarium at their offices. Photo: CTech

“We’ve been a traditionally observant family for generations,” Torpiashvili said. “My grandfather wore a kippah (skullcap) in Russia. My father didn’t, but I do. I’m not radical, but having faith is a good thing to have in life. It helps put things in perspective.”

Next to his desk space lies an empty chair, which formerly belonged to his twin brother Iliya (Eli) - who like the other two co-founders, brothers Gabi and Avraham (Avi) Shalel - left Plarium after its 2017 exit. Haim is the only one of the co-founders, who all immigrated to Israel from Georgia, that is still here. Our interview is his first to the media. He immigrated to Israel from Sokhumi, the capital and largest city of the Republic of Abkhazia in Georgia with his parents, twin brother, and two older siblings, and grew up in Rehovot.

It seems as if the high-tech exit separated you two.

“As a family, it didn’t divide us. But it’s true that now my brother and I spend less time together. He used to sit right here, and I sat next to him,” Torpiashvili said, pointing to the nearby chair, “that’s why we have two chairs. Only a few months ago, his computer was still here. He still has a family picture on his desk, and his things are here too.”

All of the co-founders realized their shares after the exit, but you’re the only one that stayed here and are still listed as the VP of Products at Plarium. What did you invest your shares in?

“A little in real estate, but the rest I’m still thinking about. I’m not in a rush.”

So you don’t want to, like your twin brother, to start all over again from scratch, maybe build another company?

“We all have fantasies, but we need to be realistic. We must remind ourselves what we started and accomplished, and have both feet on the ground.”

Meaning?

“The passion exists, but today it isn’t easy. In order to build a company you need a very large-sized investment and competition is fierce. It’s not like back when we started in 2009, and within a month gamer traffic flowed freely. Today, there are also other risks that I'm not prepared to take. That’s why after I sold the shares, I remained in my current position. I’m good at what I do, people respect me, and we have great people here who work together like a family. I come to work motivated.”

“A doctor in the USSR, became a janitor in Israel”

It’s hard to not be impressed at Torpiashvili’s success story which is a rarity in the Israeli high tech industry. His life story, worldview, or even how the company started, none of them are standard for the Startup Nation. His parents, Reuven and Lali, immigrated to Israel 28 years ago, when Haim and his twin brother Iliya were only 10 years old, along with an older brother and sister.

“When the anti-Soviet riots first began in Sokhumi, on the Baltic Sea between Gruzinia and Abkhazia, my family decided to move to Israel and start a new life,” Tropashvili says. “In Georgia, my father was an experienced oral surgeon for 22 years, the best in the entire city. My mother was a nurse and doctor’s assistant, helping my father at the clinic. They married young, my mother was around 15 or 16 and my father was 22. Although they married young, they are still lovebirds. In Georgia we grew up in a home where my parents were always home and there was always dinner on the table. We were lucky. After we immigrated to Israel, our lives completely changed. A doctor over there became a janitor or worked in a supermarket in Israel.”

Even your parents?

“Obviously. It was very difficult to acclimate to society. They didn’t speak Hebrew or English, and couldn’t work in their chosen fields.”

So what field did your father work as?

“He picked oranges, worked in a bakery, and in a warehouse.”

“And then smartphones caught on”

The need to make a living pushed Haim to be involved in business early-on with his brother Iliya, and they became partners on the Narod site, a popular web portal in Israel for Russian-speakers. “It was my first entry into high tech, and I had zero prior experience,” he says. “We invested a sum of money that we gathered and began working to amass data in the areas of computers and high tech, without ever writing code.”

What did you do then?

“We understood what the world needed. We knew how to assemble the right teams, lead them, and that’s what we did. We saw the demand for games, and that was how our desire to work in gaming was born without even knowing the where or the how.”

Plarium Plarium's Sparta game. Photo: Amit Shaal Plarium

Iliya married at 18, and his wife’s cousins are Avi and Gabi Shalel, who were only 14 and 16 back then. “We had an immediate bond, and over the years we often spoke of doing something together in gaming. We fantasized about making a social gaming app. We said: ‘let’s make a poker game,’ and took some inspiration from a Zynga game on Facebook, and already had a team from our time at Narod. We had programmers, graphic design artists, everything we needed. Gabi and Avi studied economics and business management in Boston and when they returned, we started. It was important to us to build something that would last in the long-term, so that we could make a respectful profit. We were traumatized by constantly having to worry about our livelihood.”

Plarium was founded in 2009 and developed relatively simple casual games for players to pass the time on Facebook or PCs. It released Poker Shark, a poker game that it developed in a month since it needed to compete with “Texas hold ‘em,” and remains one of the most popular poker games on Russian networks. Later, it developed Farmandia, similar to Zynga’s Farmville, which spread like rapid fire across Russian platforms. It easily became profitable, in part due to its virtual products it sold to help players take shortcuts in games.

“Around 2014, we saw that smartphones are catching on, and that the mobile market was growing,” Torpiashvili said. “That requires new technology, visuals, and an entirely new gaming experience. It took us time to understand how we could make that work. We experienced a difficult first year, just like many other gaming companies, since at the beginning mobile technologies didn’t work well, and not everyone knew how to write code for mobile devices. It was difficult to train people, we had technical problems inside the games, and it took time until we found the right technology suitable for mobile devices.”

When did the breakthrough happen?

“Our first strategic mobile game was “Vikings: War of Clans,” which was released in 2015 and became a big success. It happened after learning the hard way, and once our competitors’ games on social media networks disappeared since they weren’t able to successfully transition to mobile. We succeeded, thank God, and afterward released others. Based on that technology, we transitioned some older games to mobile too, and released games like “Throne: Kingdom At War,” which is a reskin of Viking (the same game albeit with different characters and environment). Later on came “Soldiers Inc: Mobile Warfare” (a war fighting game set in enemy territory) Raid, (a role-playing game set in a fantasy world), and many others.”

Had you already raised funds by that stage?

“We had, but not much. Israeli entrepreneur Gigi Levy-Weiss invested a certain sum and was a strategic partner (that allowed the company to collaborate with tech giants like Facebook, etc.). At a later stage Mikhael Mirilashvili, my brother Iliya’s father-in-law, entered as an investor. But we were already at a decent size by the time they entered the picture.”

“Is half a billion a missed opportunity?”

In 2017, when the Torpiashvili twins were 34, the exit arrived. By then Plarium already had millions of users around the world, and was sold to Australian Leisure Limited, the world’s largest poker machine manufacturer. The deal, for half a billion dollars in cash, was considered at the time as huge and phenomenal.

When you see people in high tech raising funds and completing initial public offerings (IPOs) at insane valuations, like Monday.com for example, which are estimated to sell six times less than you do and went public at a $7 billion valuation, don’t you feel like your deal could have been better?

“I can’t say that. Back then, it was amazing, a dream. To wait three or five years would have meant taking a risk. To grow from nothing to this is big enough.”

What did you have to consider?

“Well, we knew that the company is stable and of high-quality, but also knew that not every game succeeds. No one can guarantee that the next game will be a hit, or whether it will be worth tens or hundreds of millions of dollars. For every success, there are dozens of failures. That’s why we always worked on developing a few games simultaneously, and Plarium has plenty of development studios with different approaches. Waiting to sell is also a risk, and we thought that since we can’t predict the future, this offer was good for everyone.”

You’re trying to set yourselves apart, but Plarium is also part of an industry built off of the addictions of its consumers.

“There are plenty of unhealthy things that people can become addicted to - whether food, alcohol, or even extreme sports can cause a heart attack. Unlike Fortnite or console games, which demand a lot of playing time, even 12 hours, the point behind our strategic games isn’t to waste away your life. You can play the game, take a few actions, put it down, continue with your day, let things build up and come back later. The point of our games isn’t to waste your time, but to entertain.”

“What really messes with people's brains are apps like Facebook, TikTok, and Instagram. I caught my son in the middle of eating staring at a screen, stuck with his fork in the air for five minutes. Unfortunately, today it’s the adults who spend time on their phone, which is far worse than children since they don’t have anyone to tell them to put their phones down.”

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“Family is empowering”

You and your twin brother don’t belong to the clique of former Israeli intelligence soldiers from Unit 8200, you didn’t study at a prestigious college, and you don’t have a support system in academia. Do you feel like an anomaly?

“I didn’t go to college, because I didn't have the time. I learned as I went along. I was under great distress, I needed to make a living, and if you’re not book-smart, you’re street-smart. Anyways, gaming isn’t a technological high tech industry, we don’t invent technology. We used existing technologies to generate content, similar to how the movie-making industry is a business.”

“Most large high tech companies we recognize like Faceoook, Alibaba, or Instagram aren’t real tech companies since they weren’t built by people with technological backgrounds, like those in Unit 8200. They simply knew how to create a product that would win over the world. There isn’t any revolutionary technology there like that which exists at companies like Google or Apple.”

All of Plarium’s co-founders are basically family, but combining family and business isn’t easy.

“Being together is empowering. Each person brings their own knowledge to the table, their understanding and approach, and somehow it works. When we first started out, we split the work. Each person was on a task that he excelled at. Avi was the CEO since he spoke English the best, Gabi was responsible for marketing, while my brother and I worked on the product. But we were together all the time. We had the same goal. We had titles, but in the end we were all one.”

Does that make you proud?

“Yes. I tell everyone that I meet that I don’t want them to have to go through what I did. I hope they get far, even by serving in Unit 8200. I didn’t have the option to either take a gap year or study. I had expenses, I had to pay for food. But I want people to know that even if you struggled growing up like I did, you can still make it. It’s what has constantly pushed me out of difficult situations.”

What can people learn from your story?

“That my brother and I started with nothing and that is how we learned to appreciate things. As the younger generation grows up, it’s important to get the right advice. They need to be steered in the right direction, because there’s potential.”

What do you mean by that?

“In Israel after finishing their army service, the younger generation goes to college and people pursue majors that aren’t applicable these days like law, economics, accounting. A good accountant could also be a good programmer. While an accountant earns X, a programmer could earn five times that amount, and there’s also high demand. There are hardly any open positions for accountants or lawyers, because there are already too many. If you are capable of being a good lawyer because you think analytically, then you can also be a good script writer or game designer. Everyone dreams of being a private criminal defense lawyer who makes millions, but by the age of 40 it suddenly hits you that dream is no longer possible, and there’s nothing you can do.”

“Today, people need to study fields such as medicine or anything related to high tech. I don’t think we should try to fool the younger generation, and send them off to study professions that are easy and no one needs. There is a large shortage of programmers and technological people, so young people should learn what the market needs these days and shouldn’t be confused.”

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