Weekly Game Investments Update #25

June 15, 2020 — June 21, 2020

Summary

• American video game giant Epic Games is raising $0.75B at a post-money valuation of $17B. Valuation multiples are EV/Revenue’19 = 4.0x and EV/EBITDA’19 = 23.0x. Probably, the proceeds from the financing round will be used to substantially expand the business by continuing investments in new expertise (M&As) and bringing new content to the digital store
• Sweden-based video game developer Stillfront Group (OTCMKTS: STLFF) has raised $126.6m in a directed share issue to Swedish and international investors. The company plans to use raised proceeds for executing potential future acquisitions and growth opportunities
• US-based venture capital fund led by Dmitry Grishin (co-founder of Mail.Ru Group), Grishin Robotics announced a new $100m fund. The fund has expanded its investment focus from robotics hardware and IT into new industries such as online gaming and interactive entertainment
• LA-based Cloud Imperium Game has raised over $300m via crowdfunding initiatives for its’ multiplayer sci-fi combat simulator title Star Citizen. Over 2.7m people have joined the crowdfunding campaign with an average donation size of $110. Overall, Cloud Imperium Games has raised over $360m via investments ($63m) and crowdfunding initiatives (over $300m)
• US-based Zynga creates $25m fund for educational and charitable purposes to be distributed over the next 5 years. The primary aim of creating a new fund is to increase diversity and inclusion within the video game industry
• London-based AR/VR in-game advertisement platform Admix has raised $7m in the Series A funding round led by Force Over Mass. Currently, Admix works with 200+ developers and runs campaigns from 500+ advertisers each month
• Ukrainian blockchain-based gaming marketplace DMarket has raised a $6.5m round led by Almaz Capital with the support from Xsolla. The funds will be used to expand the staff by hiring engineering and executive talents and further improve its decentralized, in-game items marketplace. Up to date, DMarket has raised over $40m
• American platform for esports leagues Mission Control receives $1.75m funding from undisclosed angel investors
• US-based indie game publisher Whitethorn Digital has received $1.2m financing from Erie Insurance’s Opportunity Zone Fund. The company plans to expand the team and to purchase and refurbish a new office in Pennsylvania
• Canada-based video game developer and multi-platform game outsourcer iLLOGIKA Studios has received non-dilutive $1.1m financing from BDC Capital. Raised funds will be used to develop two new video games.
• Romanian game design browser-based platform Machinations has raised a Series Seed round of $650k led by GapMinder to further develop its’ solution
• UK-based game services provider and game developer SockMonkey Studios has secured a $310k investment from the Northern Powerhouse Investment Fund. SockMonkey will use raised funds to launch Fish Tanks — their first original game that is planned to be available on all the major platforms this summer

Epic Games raises $750m at $17B valuation

• American video game giant Epic Games is raising $0.75B at a post-money valuation of $17B — it is more than the current market cap $14.7B of Take-Two Interactive, the company behind GTA V and RDR 2
• According to Bloomberg, several newcomers (T. Rowe Price Group, Baillie Gifford) and existing investors (KKR & Co.) will participate in the current round
• Founded in 1991, Epic Games has raised $1.6B to date, including
  i) $1.25B raised from private equity group KKR and other financial investors in 2018
  ii) $330m raised from video game strategic investor Tencent in 2012

Read Full Article for more.

Stillfront Group successfully raised $127m in a directed share issue

💸 Directed Share Issue
Swedish video game developer Stillfront Group has raised $126.6m in a directed share issue to Swedish and international investors. The company plans to use raised proceeds for executing potential future acquisitions and growth opportunities.

Key numbers:
- Stillfront issued 1,558,441 new shares at a price of SEK 770.0 per share
- Share issue resulted in dilution of 4.6% of shares and votes
- Subscription price corresponds to a premium of 7.8% versus the volume-weighted average price the latest 10 trading days
- Stilfront Group’s current market cap — $2.9 billion

💵 Previous directed share issues
Over the last 12 months, Stillfront Group has raised around $230m through a directed share issue:
1) April 2020: Stillfront has paid $37.5m to the sellers of Candywriter as a way of set-off against the transfer of 708,463 newly issued shares in Stillfront through a directed share issue
2) January 2020: Stillfront conducted directed share issues raising $137m to finance the acquisition of Storm8, Inc. and strengthens future financial flexibility
3) August 2019: Stillfront raised $1.5m proceeds through a directed share issue in order to set-off Imperia Online sellers’ claim as a part of the earn-out consideration to be paid following the Company’s acquisition of all of the shares in Imperia 2018
4) June 2019: Stillfront issued around $53m through a directed share issue advancing its future financial flexibility after $90m deal with KIXEYE

Moreover, the company has issued around $106m of debt under the $106m framework of its 2019/2024 senior unsecured bond loan.

🎯 Conclusions
- Stillfront Group typically uses a combination of cash and directed share issue as the form of payment for gaming studios’ acquisitions
- Stillfront is an active strategic buyer with recent acquisitions in the mobile casual gaming sector (Storm8, Candywritter) and recently raised funds for future acquisition opportunities

⚙️About Stillfront Group
- Founded in 2010
- Headquarters — Stockholm, Sweden with a group of 14 studios operating in Australia, Bulgaria, Canada, Germany, Jordan, Malta, Romania, Sweden, United States and Vietnam
- Well-diversified active portfolio consisting of 36 games in 3 product areas: i) strategy; ii) simulation, RPG & action; iii) casual & mash-up
- Team of 750+ employees

Grishin Robotics has raised $100m fund

💸Fundraising
- US-based venture capital fund Grishin Robotics announced a new $100m fund with several institutional and individual investors from Europe and the US
- The fund has expanded its investment focus from robotics hardware and IT into new industries such as online gaming and interactive entertainment
- The new fund will be primarily focused on Series A & B deals (average size of $3m — $6m)

💵 Previous fundraising
- closed Grishin Robotics Fund I with the size of $25m in 2012
- closed Grishin Robotics Fund II with the size of $100m in 2016

🎯 Probably Grishin Robotics is actively looking for interesting video game studios to invest in.

🧾 In March 2019, Grising Robotics invested in a US-based indie games publisher Rogue Games with a recent follow-on round in May 2020.

🏦 About Grishin Robotics
- Founded in 2012 and led by Dmitry Grishin (co-founder of Mail.Ru Group)
- Headquarters — Menlo Park, United States
- VC fund with a focus on robotics hardware, IT and entertainment industries
- The fund has made over 30 investments (primarily seed and Series A investments)
- Team of 9+ employees

Star Citizen has raised over $300m in the crowdfunding campaign

💸 “Crowdfunding” campaign
- LA-based Cloud Imperium Game has raised over $300m via crowdfunding initiatives for its’ multiplayer sci-fi combat simulator title Star Citizen
- Over 2.7m people have joined the crowdfunding campaign with an average donation of $110
- In fact, Star Citizen departed from conventional crowdfunding back in 2014. Nowadays, each donation provides you with access to in-game items like ships, resources and other digital staff in the Star Citizen universe. Such types of money donations (revenue) are listed as “crowdfunding” proceeds
- Overall, Cloud Imperium Games has raised over $360m via investments ($63m) and crowdfunding initiatives (over $300m).

🎯 To put that in perspective, the most expensive AAA-games of all time were GTA V with $265m and CoD: Modern Warfare2 with $250m for development and marketing budget.

💵 Previous financing rounds
- In March 2020, Cloud Imperium has received $17m in funding from existing investors Calder Family Office, Snoot Entertainment, and ITG
- The same group of investors has pulled in $46m at nearly $500m post-money valuation in December 2018

🎲 Products
Cloud Imperium currently develops two titles:
- Star Citizen — a space sim MMO, that combines classic space sim gameplay with amazing visuals. Star Citizen has not yet received an official commercial release
- Squadron 42, a Hollywood-caliber story-driven single-player game set in Star Citizen’s universe

⚙️About Cloud Imperium Games
- Founded in 2012 by developer Chris Roberts (known for Wing Commander series and Freelancer)
- Headquarters — Los Angeles, USA
- Developer of multiplayer sci-fi combat simulator title Star Citizen
- Total OPEX and CAPEX accounted for $56m in 2019 with over 520 employees
- More information on headcount and financials here.

Zynga creates a $25m fund for educational and charitable purposes

US-based Zynga creates $25m fund for educational and charitable purposes to be distributed over the next 5 years. The primary aim of creating a new fund is to increase diversity and inclusion within video game industry.

This fund is Zynga’s response to the latest protests towards racial injustice that affected its players, workers, and others. Within the last two week, Zynga team members have contributed greater than USD $70,000 in funds that qualify for the combined 4 to 1 matching packages from Zynga and Mark Pincus.

⚙️About Zynga
- Founded in 2007
- Publicly traded company since 2011
- Headquarters — San Francisco, United States
- Mobile game developer and publisher, active strategic buyer
- Team of 1,900+ employees

Admix has raised $7m in Series A funding led by Force Over Mass Capital

💵 Series A financing round
- London-based AR/VR in-game advertisement platform Admix has raised $7m in the Series A funding round led by Force Over Mass, with participation from Speedinvest, Sure Valley Ventures and Nigel Morris

💵 Previous financing rounds
- In November 2018 Admix closed Seed round with $2.1m funding. SpeedInvest led the riund with additional investment from Suir Valley, Force over Mass and Founders Factory
- In February 2017 the company received an undisclosed funding in Seed round solely from Axel & Boris — chairmen of Yesss Capital, Yessspreneurs & Visionaries

🎲 Product
- Admix developed a platform for Unity and Unreal engines that allows game creators to easily integrate ads by dragging and dropping billboards, posters and 3D spaces into their games
- The tool is compatible with all the major platforms from mobile gaming to immersive VR experiences
- Admix works with 200+ developers and runs campaigns from 500+ advertisers each month. It already counts 5,000 advertisers among its ranks using the platform

⚙️ About Wam Group Ltd. (also known as Admix, formerly Advir)
- Established in 2015
- Headquarters — Londonderry, New Hampshire, U.S.
- Founded by Samuel Huber and Joe Bachle-Morris
- Developer of in-game advertisement soft

DMarket raises $6.5m adding EA’s founder to the board members

💵 Venture funding
- Ukrainian blockchain-based gaming marketplace DMarket has raised a $6.5m round led by Almaz Capital with the support from Xsolla
- The funds will be used to expand the staff by hiring engineering and executive talents and further improve its decentralized, in-game items marketplace
- Up to date, DMarket has raised over $40m
- DMmarket has also announced that ex-CEO and founder of Electronic Arts Trip Hawkins joined the company as a board member

🎯 Currently, DMarket is looking for additional $2m investments

💵 Previous financing rounds
- In August 2019, DMarket raised $11.5m of investment at the first phase of ICO. Pantera Capital led the round, with participation of Alexis Berthoud and Alex Dahan
- In December 2017, DMmarket raised around $25m in cryptocurrencies via ICO procedures
- According to the founders, DMarket now sells goods worth about $100k daily

🎲 Product
- DMarket has developed an in-game item trading platform based on blockchain technology, where people can buy and sell items and skins from CS:GO, Dota 2, Team Fortress 2 and Life Beyond
- DMarket’s partners include Xsolla, Unity, 4A Games, GSC Game World, Darewise, Playkey, Kiss, and Tatem Games
- DMarket now has about 1m users, and revenue in the first months of 2020 was $450k

⚙️ About DMarket
- Established in 2017
- Headquarters — California, USA with large office in Ukraine
- Founded by Alexander Kokhanovskyy, Tamara Slanova and Vlad Panchenko
- Team of 75 employees with about 70 of them in Ukraine
- Blockchain-based in-game items marketplace

Mission Control has received $1.75m of angel funding from undisclosed investors

💵 Seed financing round
- American platform for esports leagues Mission Control receives $1.75m funding from undisclosed angel investors

🎲 Product
- Mission Control is a platform for Esports communities, which helps game developers to create their own leagues to gather their fans and market their product
- Among the organizations hosting their own leagues on Mission Control are Play Fricso, GameStop and Monumental Sports & Entertainment, several regional communities and universities leagues

⚙️ About Mission Control
- Established in 2018
- Headquarters — St. Louis, Missouri, US
- Founded by Austin Miles Smith, Brandon Smith and Byron Abrigg
- Platform for recreational Esports leagues

Whitethorn Digital raised $1.2m from Erie Insurance’s Opportunity Zone Fund

💵 Seed Funding
- US-based indie game publisher Whitethorn Digital has received $1.2m financing from Erie Insurance’s Opportunity Zone Fund
- Whitehorn Digital plans to expand the team and to purchase and refurbish a new office in Erie (a small city in Pennsylvania)

🎲 Products
- Whitethorn focuses on low-budget independent games publishing on game consoles and PC platforms
- There are 15 games published by Whitethorn Digital and 2 more games in production

⚙️ About Whitethorn Digital
- Established in 2016
- Headquarters — Erie, Pennsylvania
- Founded by Matthew White
- Team of 8 employees (plans to expand the team to 20–25 people in the next 3–5 years)
- PC and console indie games publisher

iLLOGIKA Studios has raised $1.1m from BDC Capital

💵 Early Stage Financing
- Canada-based video game developer and multi-platform game outsourcer iLLOGIKA Studios has received non-dilutive $1.1m (CAD 1.5m) financing from BDC Capital
- Raised funds will be used to develop two new video games:
a) Rogue Racers — a mobile racing game, in the final stages of development
b) unannounced licensed game with horror and science fiction focus based on blockbuster movie series.

🎲 Products
- Illogika Studios is known for collaboration with major game developers (e.g. EA, Ubisoft) and publishers on production and porting of their games
- Illogika Studios is also known as an immersive experiences designer that created interactive installation for the Hunger Games franchise уxhibition and developed an app for Samuelsohn clothing brand

⚙️ About Illogika Studios
- Established in 2009
- Headquarters — Montreal, Canada
- Founded by David Fugère-Lamarre, Olivier Martin and Loïc Cayuela
- Team of 60 employees
- Canadian video game developer, outsourcer, and immersive experiences designer

Machinations closed €580k seed round led by GapMinder

💵 Investments — Seed round
- Romanian game design platform Machinations has raised a Series Seed round of €580k led by GapMinder — VC Fund investing in IT software and services start-ups in Romania and Central Eastern Europe
- Raised investments will be used to further develop Machinations game design tool

💵 Previous financing rounds
- This round brings the company’s total funding raised over €1m
- In May 2019 Machinations raised $325k from SeedCamp, Venrex Investment Management and Alexis Bonte in a Pre-Seed round
- In October 2018 the company received $162k in Pre-Seed funding from Fit4Start

🎲 Product
- Machinations has developed browser-based platform to design, balance and simulate game systems
- The pricing is based on the monthly subscriptions with Free solution for 1 user and Free monthly trial period

⚙️ About Machinations
- Established in 2018
- Headquarters — Mamer, Luxembourg
- Founded by Joris Dormans
- Game development software

SockMonkey Studios receives $310k funding to launch its first games on multiple platforms

💵 Venture funding
- UK-based games developer SockMonkey Studios has raised $310k (£250k) investment from the Northern Powerhouse Investment Fund — joint initiative of the UK Government, the European Investment Bank, the British Business Bank and the European Regional Development Fund
- SockMonkey will use this investment to launch Fish Tanks — their first original game that is planned to be available on all the major platforms (mobile, Switch, PC, Xbox One and PS4) this summer
- Currently employing 18 people, SockMonkey plans to triple its personnel by 2021 to support the growing needs of the studio

💵 Previous financing rounds
- In September 2019 SockMonkey received £10k funding from HSBC UK — one of the largest UK banks. The company spent this money on refurbishment of its Middlehaven office so it could fit its growing team

🎲 Services & products
- In 1Q 2020, SockMonkey successfully ported Deliver Us The Moon from PC to console (PS4 and Xbox One) as well as developed the Nintendo Switch version of Prison Architect
- The company is also known for porting Team 17 game The Escapists to Android, and supporting other gaming studios: Hello Games, Barog Games Lab, Double Eleven, Wizard FU Games, Playstack and Musicplode

⚙️ About SockMonkey Studios
- Established in 2013
- Headquarters — Middlesbrough, U.K.
- Founded by Darren Cuthbert and Bob Makin
- Team of 18 employees