Weekly News Digest #15
# of announced deals
15
announced deals’ size
$3.3B
# of closed deals
14
Niantic acquires AR-focused studio NZXR
US-based AR-gaming company Niantic has announced the acquisition of New Zealand-based AR studio NZXR for an undisclosed sum.
In Nov’21, when Niantic received $300m investment from Coatue at $9B valuation, the company shared its plans to build ‘real-world metaverse’ through the creation of social games that motivate people to interact with each other and the world outside. The company had been consistently moving toward its goal via the series of four acquisitions made over the course of the previous year:
— US-based instant videogame replays startup Lowkey;
— US-based provider of tech solutions for game developers Hoss;
— Online platform for gaming communities Mayhem;
— 3D scanning mobile application Scaniverse by Toolbox AI;
This year, Niantic continues its active M&A strategy. Earlier, the company acquired a web-based AR development platform for PC, mobile, and AR/VR creators 8th Wall.
All of the abovementioned acquisitions show how serious Niantic is about building its own ecosystem. Each of the five companies is developing tools or platforms which may serve as add-ons for Lightship ARDK — a platform with the development tools for the creation of AR games and experiences, which seems to be an integral part of the future Niantic metaverse. However, NZXR acquisition is more about enriching the ecosystem’s content and improving the development expertise, rather than enhancing technical infrastructure.
Founded in 2020 by the former New Zealand-based Magic Leap team, NZXR went beyond enterprise AR and supported other companies with its development expertise. Thus, NXZR participated in the creation of the interactive museum experience Destination Mars and AR skateboarding simulation Skatrix. Now the company will use its wide expertise to bring new types of AR experiences to Niantic’s ‘real-world metaverse’.
Take-Two Interactive will raise $2.7B via senior notes offering
US-based video game company Take-Two Interactive Software (NASDAQ:TTWO) announced an underwritten public offering of Senior Notes to raise $2.7B, consisting of:
— $1B of 3.3% Senior Notes due 2024;
— $0.6B of 3.55% Senior Notes due 2025;
— $0.6B of its 3.7% Senior Notes due 2027;
— $0.5B of its 4.0% Senior Notes due 2032.
The offering is still subject to satisfaction of customary closing conditions, and is expected to take place on April 14, 2022. Part of the net proceeds will be used to fund the cash portion of the $12.7B acquisition of US-based mobile game developer and publisher Zynga (Nasdaq: ZNGA). The offering will also finance the expected settlement of the outstanding convertible notes issued by Zynga in accordance with the acquisition. The remaining part of the net proceeds will be used for the general corporate purposes.
There are four joint book-running managers for the offering: JP Morgan Securities, Wells Fargo Securities, BNP Paribas Securities, and BofA Securities.
If the acquisition is not closed on January 9, 2023, or is terminated prior to the date, the Senior Notes will be redeemed.
Sky Mavis raises $150m to compensate for the hacker attack
Vietnamese blockchain-based games developer Sky Mavis has raised $150m in a funding round led by Binance, with participation from Animoca Brands, a16z, Dialectic, Paradigm, and Accel. The proceeds will be combined with cash from Sky Mavis’ balance sheet to provide Axie Infinity players with compensation for the $650m hacker theft the company faced recently.
On March 29, Sky Mavis announced that the hackers used a security breach on the Ronin Network, which allows Axie Infinity players to exchange the crypto they earn in the game, and stole 173,600 Ethereum and 25.5m USDC — the largest hack in the history of crypto. At the moment of writing, Ronin Network is still unavailable, while Sky Mavis is working on the security upgrade and conducting necessary audits.
The new round almost equals Sky Mavis’ $152m Series B round of funding closed in Oct’21, which was one of the biggest rounds secured by a blockchain-gaming company last year. You can read more about the deal in one of our previous digests.
We want to thank Hiro Capital and The Games Fund for supporting this digest.
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MERGERS & ACQUISITIONS
Saudi Arabia’s Electronic Gaming Development Company (a subsidiary of the Crown Prince Mohammed bin Salman Foundation) has increased its stake in Japan-based PC&console games developer SNK Corporation to 96.18% stake. The total consideration is almost $400m for 62.88%of all shares. The deal, initially proposed late last year, was finalized only on February 15, according to SNK’s website. Earlier in Nov’20, the crown prince acquired a 33.3% stake in SNK. The takeover of SNK is the latest gaming acquisition by the Saudi company: earlier this year Bloomberg reported that the Saudi Arabia’s Public Investment Fund (PIF) bought over 5% in both Capcom and Nexon for the total consideration of over $1B.
VENTURE FINANCING
India-based hypersocial games developer and publisher Bombay play has raised $7m in Series A funding. The round was led by Kalaari Capital, with participation from Lumikai Fund, Leo Capital, and others. The funding will be used to increase the company’s presence in the hypersocial genre, and fund upcoming projects.
Sweden-based P2E blockchain-based startup GOALS has raised $15m in Seed funding. The round was led by Northzone, with participation from Cherry Ventures, Moonfire Ventures, and others. GOALS is an upcoming multiplayer football play-to-earn game. The funding will be used toward adding more staff and further developing the game.
US-based venture capital fund with a focus on gaming, Web3, and immersive technology BITKRAFT Ventures has received a $2.5m investment from India-based sports and media company Nazara Technologies. The aim of the deal is to help BITKRAFT expand its presence in the Indian market, while Nazara will gain access to the BITKRAFT portfolio companies. Nazara will invest $875k upfront and another $1.6m over a period of three years.
US-based developer of games with blockchain technologies Block Tackle has raised $5m in Seed funding. The round was co-led by Cadenza Ventures, and Play Ventures, with participation from Animoca Brands, Coinbase Ventures, Solana Ventures, and others. The funding will be used towards the development of the upcoming multiplayer title SkateX built on the Solana network.
Israel-based training platform for gamers NOVOS has raised $6m in funding. The round was led by MizMaa Ventures, with participation from Remagine Ventures, Gal Ventures, and others. The funding will be used to expand the platform for other game titles, since now it is focused on Fortnite only.
US-based newly-founded mobile game developer Superbloom has raised $3m in Seed funding. The round was led by BITKRAFT Ventures with participation from 1Up Ventures, and Joakim Achrén Syndicate. The funding will be used towards hiring the team and developing the first mobile title for the studio.
US-based gaming agency Loaded has raised $20m in Seed funding. The round was led by Coral Tree Partners. The funding will be used toward further expansion of the talent’s roster, and the development of new services.
Germany-based mobile games for esports-fans developer Legendary Play has raised $4m in Series A funding. The round was co-led by BITKRAFT Ventures and MTG (STO: MTG B). The funding will be used towards the development of new titles for the esports audience.
US-based wed3 esports platform Community Gaming has raised $16m in Series A funding. The round was led by Softbank’s SB Opportunity Fund with participation from Animoca Brands, Binance Labs, BITKRAFT Ventures, and Griffin Gaming Partners. The funding will be used towards the company’s expansion with a focus on Latin America and Southeast Asia markets.
US-based web3 games developer Digital Insight Games has raised $7.5m in Seed funding. The round was co-led by Hivemind Capital, and Griffin Gaming Partners with participation from RSE Ventures, and others. The studio was co-founded by the creator of the first Might and Magic game Jon Van Caneghem and former Tencent executive Jack Sheng. The funding will be used towards the development of original blockchain games, since the company aims to become a pioneer in web3 gaming.
France-based in-game advertising platform for games and esports Gadsme has raised $8m in Seed funding. The round was led by Galaxy Interactive, with participation from Ubisoft, and others. The funding will be used toward the growth of the in-game advertising offering of the platform.
