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TinyBuild Goes Public At $473m Valuation

PUBLIC OFFERING | ANNOUNCEMENT DATE: 10 MAR 2021
WRITTEN BY | 01 Apr 2021
TinyBuild Goes Public At $473m Valuation
PUBLIC OFFERING

💵Initial Public Offering

  • US-based indie game publisher and developer tinyBuild (LON: TBLD) went public at ~$473m (£340.6m) market capitalization

  • The company has offered around 202m shares at 169 pence share price. As a result of the IPO tinyBuild raised gross proceeds of ~$213m (£154.4m), most of which go to the institutional and other shareholders of the company and only ~$50m (£36.2m) are for tinyBuild

  • The proceeds from the IPO will allow the company to invest more into the talents and development of new and existing franchises, using its multi-title and cross-media approach

  • The offering will also support the future acquihirings of the company and increase the average M&A consideration. We can expect tinyBuilds to further establish its international development network and diversify into new markets, platforms, and media

🔍 TinyBuild’s Strategy

  • The company has its own-IP focused strategy, which is based on strong long-term relationships with early-stage developers. tinyBuild helps them to grow expertise and develop their IPs and then acquihires the team with its franchise via assets acquisitions

  • tinyBuild has an impressive geographical spread with 44 development partners across five continents, which makes it possible for the company to work with different, mostly emerging, markets and further diversify its offering

  • The company focuses on digital-led premium gaming, publishing its key titles on all the major PC, mobile, console, and streaming platforms. Games are usually first published on PC and then launched on other platforms depending on their performance, which ensures lower upfront development risk

  • tinyBuild works on expanding its gaming IPs to other markets, including books, TV, film, and merchandise — the company has sold over 1.6m books and reached more than 40m views on YouTube

💸 Financial Performance

  • For the six months ended June 2020, tinyBuild reported $18.5m of revenue, (53% increase compared to H1’19) and Adjusted EBITDA of $6.7m (3.5x times higher than in H1’19)

  • In H1’20 tinyBuild’s net income reached $1m, compared to ($3.5m) loss in H1’19

  • Total net cash generated by operating activities in the H1’20 was $6.9m, while in the H1’19 it accounted for $7.9m

  • The company’s base cost of launching the 23 games in the pipeline for 2021 and 2022 is expected to reach $24.6m

🏦 Acquisitions

  • Rather than making traditional acquisitions, tinyBuild tend to acquihire the developers and buy the franchise the team has worked on. Moreover, tinyBuild proposes acquihirings only to the developers it has worked with. The average relationship length before each transaction is around 3.6 years

    • Since 2013, the company has completed six acquihirings and two strategic investments. Such transactions typically consist of cash, royalty-based benefit programmes and incentives for the developers

  • In line with tinyBuild’s M&A strategy goes its franchise-focused approach characterized by long product lifecycles and monetization opportunities. The company considers Hello Neigbor an example of a successful multi-tile franchise and plans to develop other games the same way

  • In Feb’21, tinyBuild acquihired Hungry Couch, a Russian PC&console game developer behind the Black Skylands title (which was acquired separately by tinyBuild in 2019) for an undisclosed sum

  • In Jan’21, the company acquihired a US-based multi-platform game developer We’re Five Games for an undisclosed sum

  • In Nov’20, the Company acqhuihired Moon Moose, a Russian PC games developer behind Cartel Tycoon title (which was acquired separately by tinyBuild in 2019) for an undisclosed sum

  • In Oct’20, tinyBuild acquihired Hologryph, Ukraine-based PC&console game developer under the titles Secret Neighbor and Party Hard 2 for an undisclosed sum

  • In Apr’20, the Company acquihired US-based multi-platform game developer HakJak Productions for an undisclosed sum

  • In Sep’19, tinyBuild acquihired a development team of Hello Neighbor and the franchise franchise from the Russia-based PC&console game developer Dynamic Pixels

  • Moreover, tinyBuild made 2 investments, including the minority investment in video game industry conferencing company DevGAMM in Jan’18, and the investment in US-based events management software provider Pine Events in Sept’18

🎲 Product

  • tinyBuild is known for AA and indie games publishing and development. Up to date, the company has published 40 games and now it expects to publish 23 more in 2021 and 2022, of which 19 games are entirely new games and 4 games are based on the current IPs

  • The company portfolio is vast and diversified — 28 titles contributed 79.2% of revenue in 2019

  • The company has 7 internal studious with 147 employees working in the offices across 15 different countries

  • Currently, one of the main assets of the company is an indie survival horror franchise Hello Neighbor, which has over 60 million downloads across all its games

Sources: IPO Prospectus, VENTUREBEAT, GAMESINDUSTRY

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TinyBuild
  • Established in 2011
  • Headquarters – Bellevue, Washington, United States
  • Founded by – Alex Nichiporchik, Luke Burtis and Tom Brien
  • Indie game publisher and developer
Site Link: tinyBuild