The developer of battle game Fortnite, Epic Games is reportedly looking to raise $750mn at a valuation of $17bn, according to a Bloomberg report. The valuation includes the new funding and is up from the $15bn valuation the company garnered in 2018.
As more and more startups are laying off employees, the recent development at Epic Games shows that there is a huge opportunity for some companies which cater to the “new essential” of consumers. Online games have been witnessing a surge of users as governments pass stay-at-home order due to the lockdown.
Epic Games also own the networking app Houseparty. Fortnite and Houseparty were two of the biggest hits during the lockdown and investors are betting that these platforms will continue to be used by consumers.
The new funding round will see participation from new investors like T. Rowe Price Group Inc and Baillie Gifford, while existing investors KKR & Co. will also participate in the round. According to the report, the funding round isn’t finalized and some of the details could still change.
However, Representatives for Epic Games, Baillie Gifford, KKR and T. Rowe Price declined to comment.
Another reason for this huge success of online games is that these games are just more than plain video games that we used to play three four years back. Epic Games and its video game competitors are becoming destinations to watch concerts and debut movie trailers. Nearly 28 million fans flocked to an April concert by rapper Travis Scott, which was held virtually in Fortnite. In May, Epic aired a new trailer for the upcoming Christopher Nolan movie “Tenet” on Fortnite.
Epic Games, which was founded in 1991 by Tim Sweeney from his parents’ house in Potomac, Maryland, also owns Houseparty, which integrates games and trivia into group video calls. It bought the platform for an undisclosed amount about a year ago before it became a breakout hit during the pandemic. The app’s last private valuation was about $70 million, according to PitchBook data.
Sweeney sold 40% of the company to Chinese internet giant Tencent Holdings Ltd. in 2012. Other minority owners include Walt Disney Co., aXiomatic Gaming LLC and Endeavor Group Holdings Inc.
HrNxt.com Newsdesk has researchers and writers with an excellent domain knowledge about the talent ecosystem, and the business environment. The team keeps a tab on the latest happenings in the ecosystem to bring most relevant news and insights for our readers. You can connect with our newsdesk at newsdesk@hrnxt.com.