In a time when deeply unprofitable companies are going public, it’s rare and refreshing to hear about startups that are (gasp) actually making money.
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Mobile game publisher Scopely, based in Culver City, Calif., is one of those companies. And today it’s announced a $200 million Series D round led by NewView Capital that gives it a valuation of $1.7 billion (joining a small group of Los Angeles-based unicorns).
Canada Pension Plan Investment Board (CPPIB), Baillie Gifford, Greycroft, Revolution Growth and Sands Capital Ventures also participated in the financing. The round brings Scopely’s total raised since its inception in 2011 to $458.7 million, according to Crunchbase data.
Scopely certainly has seen impressive growth, reaching more than “$1 billion in lifetime revenue this past summer.” Plus, the Series D values Scopely at $1 billion more than the time of its $160 million Series C in January 2018. So effectively, Scopely says it added $1 billion to its valuation in less than 18 months.
That’s impressive.
If it’s making so much money, why the large raise? NewView Capital Managing Partner Ravi Viswanathan said Scopely will use its new capital to up its M&A and investment strategy.
“The M&A space in gaming is heating up,” Viswanathan told me via telephone this morning. “There’s a lot of interesting companies and assets that they can acquire and incorporate into the broad Scopely platform.”
Scopely Co-CEO Walter Driver said in a written statement that the company is “more bullish than ever” on further expanding its portfolio through M&A.
“This funding round adds the financial support to pursue large-scale acquisition opportunities,” Driver added.
The company in particular is looking to enter new categories and/or broaden existing genre portfolios.
Scopely has a good track record. According to Viswanathan, it’s produced six games in a row that are on track to reach or surpass $100 million in gross lifetime revenue, which he said “is pretty astounding.”
At the end of 2018, the company added two new games to its portfolio: Looney Tunes™ World of Mayhem and Star Trek™ Fleet Command, which was created with the recently-acquired DIGIT Game Studios out of Ireland. The latter is now Scopely’s fastest-growing title ever, according to the company.
“Gaming is a massive market, worth over $130 billion, and mobile gaming is the fastest-growing piece of it, representing about half,” Viswanathan said. “In Scopely, we see significant scale, growth and profitability – an unusual trifecta. We see a huge market opportunity in front of them.”
NewView spun out of NEA (New Enterprise Associates) in late 2018, raising $1.35 billion for its debut fund. NEA had a small position in Scopely and NewView brought that over when it broke out.
“We decided to lead this round with a much bigger investment,” Viswanathan said.
Gaming may not be taken seriously by all. But if this round is any indication, maybe it should.
Illustration: Li-Anne Dias
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