Epic Games, the privately held US-based game developer whose properties include Fortnite, raised approximately $1.25bn in funding on Friday from investors including eSports team owner Axiomatic.
Smash Ventures, investment firm KKR, multi-family office Iconiq Capital, private equity firm Vulcan Capital and venture capital firms Kleiner Perkins and Lightspeed Venture Partners also participated in the round.
The transaction valued Epic at almost $15bn, people familiar with the matter told the Wall Street Journal, adding that some existing shareholders sold stock through the deal.
Epic was originally formed in 1991 but its first big hit came in the late nineties when it released Unreal, a first-person shooting game for the PC and Mac with a multiplayer option which utilised the company’s Unreal Engine and became increasingly popular in its multiple sequels.
The company moved into console gaming in 2006 when it launched Gears of War, another first-person, multiplayer-optional shooter also available for the Xbox platform, and which again spawned an entire series of games. It added mobile fighting game Infinity Blade in 2010.
Epic’s largest recent success has been Fortnite Battle Royale, a massive multiplayer battle royale game for consoles and mobile and computer operating systems, where players compete against each other in a fixed environment to be the last player standing.
The game is free to play but in-app purchases had driven its revenue to more than $1bn in just 10 months, by July this year. A cooperative version called Fortnite: Save the World is slated for release in 2019.
Internet group Tencent paid $330m for a 40% stake in Epic in 2012 and will retain a stake in the company.
Entertainment conglomerate Walt Disney and Endeavor, the company formed by the merger of talent agencies WME and IMG, will also remain as investors. It entered the former’s Disney Accelerator in July 2017 while IMG holds the licensing rights to Fortnite.
Tim Sweeney, founder and chief executive of Epic, said: “We are excited to partner with the finest minds in the financial, sports, and entertainment communities.
“This reinforces Epic’s position of leadership in real-time 3D technology, and accelerates our ability to improve the way people play, work and interact with the world.”
Raine Group and Guggenheim Securities were financial advisers to Epic on the transaction while Smith Anderson was legal adviser.
