AAA Epic announces $1.78bn in funding

Epic announces $1.78bn in funding

US-based video game developer Epic Games confirmed $1.78bn in primary and secondary funding yesterday that included a $250m investment by consumer electronics producer Sony last month, valuing it at $17.3bn post-money.

The round also featured investment and financial services group Fidelity, Baillie Gifford, Lightspeed Venture Partners, Ontario Teachers’ Pension Plan Board, KKR, Smash Ventures, private investor David Tepper and funds and accounts managed by both BlackRock and T. Rowe Price.

Epic is best known for multiplayer first-person shooting games Fortnite, Gears of War and Unreal Tournament, though it is also the owner of Houseparty, a social gaming app that has experienced a considerable increase in user numbers during the Covid-19 pandemic.

Tim Sweeney, Epic’s founder and CEO, said: “Having the support of leaders in the financial community accelerates Epic’s efforts to build a new kind of digital ecosystem using real-time 3D technology, services that connect hundreds of millions of people, and a digital storefront that offers a fair business model. We are delighted to have them as part of the Epic family.”

The company has not disclosed the identity of the investors that divested shares through the deal, but said Sweeney remains its controlling shareholder.

KKR, Smash Ventures and Lightspeed Venture Partners joined esports team owner Axiomatic, Iconiq Capital, Vulcan Capital and Kleiner Perkins to provide $1.25bn in funding for Epic in late 2018 at a reported $15bn valuation.

Epic raised $330m from internet group Tencent in 2012 at an $825m valuation and its earlier investors also include media and entertainment conglomerate Walt Disney and talent agency Endeavor.

Credit Suisse and Raine Group were placement agents for the transaction, while Epic retained Wilson Sonsini Goodrich & Rosati as legal counsel.

By Robert Lavine

Robert Lavine is special features editor for Global Venturing.

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