Kiwi entrepreneur nets multi-million dollar Microsoft deal

She worked colossal hours without pay. The office equipment didn't work properly. She stayed in ratbag hotels. But now 31-year-old Wellingtonian Claudia Batten has sold her software company to Microsoft. For up to US$400 million (NZ$643 million).

Batten is now flying high among the ranks of the dotcom millionaires in a deal which dwarfs even the recent purchase of Trade Me.

Four years ago, Batten founded Massive Inc with two expat Australians in New York, to develop software that downloads advertising into online video games - a world first.

Tapping into the "Lost Boys" market - hard-to-target 18- to 34-year-old males - was the key to the company's success, Batten said.

"We told advertisers: 'We've found the Lost Boys. They're playing games and we can get you in front of them'."

Speaking to the Herald on Sunday from Seattle, Batten was coy about how much she got from the sale, reported at between US$200-400 million ($643m). "It's all under wraps. I'm really pleased with the outcome, it's better left at that," she laughed.


The former Samuel Marsden Collegiate student and Victoria University honours graduate, left a promising career with law firm Russell McVeagh to chase her dream.

In 2002, she left for New York with lawyer husband Andrew McIlroy.

"I was really gung ho and ready to go. It didn't really hit me until we touched down at the airport. Then it was like 'Oh shit'."

She met Mitch Davis through fellow Kiwi Craig Telfer, and decided to take a chance with Massive Inc with another Aussie, Nicholas Longano.

"I always knew we were going to win. I'm not used to losing."

With a staff of only six, Batten worked without pay for the first few months. In the first year, she juggled legal work, business development, raising money and public relations.

Countless red-eye flights, rundown hotels and 18-hour workdays followed.

"Sometimes it was a real kick in the guts, a real slog. But when the first ad was served dynamically into a game, it was a world first. Just phenomenal," Batten said.

Advertising has long existed in video games, mostly in the form of static ads and product placements that cannot be changed once the game is sealed for sale. Massive's software downloads real-time advertising into background features of the action when the user is online.

In car games, for example, advertising can be inserted on billboards in the background as cars drive past. Ads can also be placed in games on pizza boxes, TV screens, soft-drink cans and vending machines.

Advertisers can change the ads around - slotting in a movie promotion one day, or a soft-drink ad the next. It's also geographically specific and can be sold around the globe.

Massive now employs 80 staff in New York, London, Los Angeles Chicago, San Francisco, Paris, Sydney, Cologne and Toronto. Its clients include Coca-Cola, major Hollywood studios and car companies. Independent industry estimates put the market at about $US700 million a year by 2010.

"A frenzy" is how Batten described the past few weeks, jetting from meetings in London, Chicago, Los Angeles and Seattle.

She is working at Massive for a few months during the company's transition to Microsoft.

With an apartment overlooking Times Square, Batten loves the hustle and bustle of New York, but is keen to come home to Wellington.

"New York is a tough city. Sometimes I feel like a caveman who's knocked the beast on the head and dragged it home. And that's just getting groceries."

She plans to return to New Zealand to share the knowledge she has gained, and did not rule out a possible move towards Parliament's benches.

Grandfather Bill Young was an MP, a Cabinet Minister and the High Commissioner to London. Auntie Annabelle Young and uncle Max Bradford were also MPs.

"Normally when your family is surrounded by politics, you run the other way, and I'm not sure if I want that gig," Batten said.

"But you never say never."