Moshi Monsters developer Mind Candy has avoided bankruptcy by renegotiating one of its loan repayments and raising $1.5 million in funding.

Accel Partners and LocalGlobe led the investment round along with other existing investors in the company.

Mind Candy also managed to secure a two-year extension on its $8.1 million loan from TriplePoint Capital. The investment firm took a $2 million markdown on the value of the loan as a result.

Significant progress

"Mind Candy has made significant operational progress during 2016 which has led us to support the business with an amendment to their outstanding loan," Sajal Srivastava, TriplePoint’s Chief Operating Officer told Bloomberg.

"We believe the company has the necessary vision, team, and intellectual property to deliver on their growth plans."

Mind Candy is pinning its hopes on its latest brand, Petlandia. The app allows players to create a cartoon pet, before buying a book featuring their pet for $30. So far 40,000 books have been sold.

The developer is also refocusing efforts on its Moshi Monsters brand with a game focused on younger players called Moshi Monsters Egg Hunt. Since launcing in October 2016 the title has achieved 500,000 downloads.