On March 21st, Sky News revealed that Epic Games, the company behind Fortnite, is finalizing the terms of a $1 billion round of fundraising almost seven months after the closure of the previous round. As a result of this latest round of funding, the company is now expected to be valued at $28 billion.
The company was previously valued at $17.3 billion back in July. This new valuation is another example of explosive growth within the gaming industry during the COVID-19 Pandemic.
“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,” said the company founder, Tim Sweeney. These comments came back in July.
Epic Games has been doing business for 30 years now. The titles the company is most famous for include Fortnite, Houseparty, and the “Gears of War” series.
The Profit‘s Take:
A 50% valuation increase in less than a year says it all here. It’s not surprising in the context of Epic’s competitors (Roblox, Unity, etc) getting huge public valuations. However, it is surprising in the context of Fortnite’s slow decline, Epic’s ongoing legal fight with Apple, and Fortnite’s exclusion from iOS. It’s hard to believe that the Epic Games Store is making up the difference. Valuation aside, the big question is will we see an Epic IPO or will the company choose to stay private?
(All information was provided by Sky News)