Balderton Capital has checked out of Habbo Hotel following a scathing exposé of the virtual world’s failure to protect its young users against sexual material.
Balderton is returning its 13 per cent stake at zero value and resigning from the board of Habbo’s parent Sulake, as first reported by the Kernel. The venture capital firm had been Sulake’s second-largest shareholder.
A spokesperson for Balderton told the Kernel: “We didn’t take this decision lightly, as we have been investors in Sulake for over 8 years, but the standards required to run a website that children have access to are very high. We felt the company was not meeting those standards.”
British television’s Channel 4 News aired the report that triggered this catastrophic chain of events for Sulake in addition to posting it on its website, detailing graphic conversations, suggestions for sexual encounters, and other unsolicited examples of unquestionably inappropriate activity.
Habbo, one of the longest-running virtual worlds for children, has long prided itself of being a safe place for young people to socialize. Sulake says its flagship property has 268 million registered users and 9 million unique visitors per month, more than half of whom are between 13 and 16 years old, and is available in 11 languages and over 150 countries.
Paul LaFontaine, who has been Sulake’s CEO for less than a year, told Channel 4 News it is committed to ensuring that children are safe on the site and reiterated that in a lengthy statement on the company’s blog with details of how Habbo supports that position.
Channel 4 [U.K.] – Striptease and cyber sex: my stay at Habbo Hotel
Channel 4 [U.K.] – Should your child play in Habbo Hotel?
The Kernel – Habbo Exposed as Pedophile Haven
Sulake blog – Message from the CEO