Moshi Monsters maker Mind Candy has confirmed that it has had to renegotiate some of its financial agreements in an effort to continue operating.
Bloomberg reports that the company has agreed to a two year extension of its £6.5m loan from TriplePoint Capital, with TriplePoint taking a £2m markdown as part of the deal. In addition, a new round of investment has injected a further $1.5m into the company.
Had these negotiations failed, it seems as if Mind Candy may have been forced into bankruptcy.
"Mind Candy has made significant operational progress during 2016 which has led us to support the business with an amendment to their outstanding loan," TriplePoint’s COO Sajal Srivastava said. "We believe the company has the necessary vision, team and intellectual property to deliver on their growth plans."
Mind Candy board member and Accel partner Bruce Golden added: "TriplePoint and the existing investors all said we need to give this company all the oxygen it needs because there are some very exciting things happening here.
"This isn’t a situation where hope is our strategy. No one is declaring victory. This company has been through a lot and has a lot to prove ahead of itself, but we think it is on the right track with the right team and the right plan."
The company’s latest venture, called Petlandia, allows users to create avatars fashioned on their pets and order personalised stories that feature them. To date that has seen around 650k avatars created and 40k books ordered.
Mind Candy rose to fame thanks to the success of Moshi Monsters, but has struggled to replicate its success with other products. It was founded by Michael Acton Smith, who stepped down as CEO in 2014. In 2015 the company was forced to shed staff and close its Brighton office.