Digi-Capital: Game Companies Raised $5.7 Billion In Investments During 2018, Epic Games Biggest Recipient

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Digi-Capital: Game Companies Raised $5.7 Billion In Investments During 2018, Epic Games Biggest Recipient

January 29, 2019

By: Max Moeller

 
 

According to a Games Report from Digi-Capital, game companies raised $5.7 billion in investments last year, doubling the amount received in 2017.

The number one investment went to Epic Games, with seven companies putting $1.25 billion into the group. KKR, Vulcan Capital, and Lightspeed Venture Partners made are a few such investors. This was also the “largest non-IPO games investment of all time,” reports Digi-Capital.

Following this, Chinese conglomerate Tencent was “either a major shareholder in or investor in four of the top five deals last year.” The group put money into Douyu which raised $630 million, Huya, who received $462 million, and Shanda Games who totaled at $474 million. Voodoo was the fifth and final investment, raising $200 million from Goldman Sachs.

Otherwise, 11 companies received $100 million or more during their investment rounds last year. Taking one-third of all money invested was mobile gaming and gaming technology such as streaming. Additional categories include MMO/MOBA games, AR/VR, esports, and traditional console/PC games - all of which raised notable amounts of money.

 
 

Last year also saw a high amount of game acquisitions. Over $22 billion in mergers and acquisitions (M&A) were made, resulting in the second highest year ever. However, most of this money comes from “mega-deals” such as Nasper selling their 2% stake in Tencent for $10 billion. 2018 saw 13 acquisitions of over $100 million, and a ton more in the range of single millions to tens of millions.

That said, mobile gaming made up most of the acquisitions, with the other major groups being MMO/MOBA and console/PC games. Interestingly, the top 10 public gaming companies make up around “three-quarters of public games company revenue and around four-fifths of public game company valuations worldwide,” reads the announcement.

The past ten years have seen gaming initial public offerings (IPOs) go through a cycle. One year will be full of them with the next two being quite slow. 2017 was the last high, with 2018 raising 90% less for some reason. The report predicts that 2019 will also be quiet. Otherwise, because of all of the great games coming out the past two years, activity within the industry has been high.

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