Overview of key fundraising tools in gaming industry and analysis of most beneficial exit options based on the recent exits in gaming sector in 2020-2021.
Regression analysis: Simple Linear Regression Multiple Linear Regression
Fundraising and exits in gaming industry – new reality / Ilya Oprenko (UBS)
1. May, 2021
Russia
Fundraising and exits in gaming
industry – new reality
Ilya Oprenko
Director, Wealth Management (Moscow Advisory Office)
2. 1
1. 2020-2021 post-pandemic gaming landscape
2. Fundraising basics: investment rounds, valuation, SHA, debt vs
equity, Seed-Series etc.
3. Fundraising/Exit trends
4. Case studies
Discussion topics
3. 2
2020-2021 post-pandemic gaming landscape
Here are some facts depicting drastic transformation of gaming industry in 2020-
2021
> USD 160 bln industry
(+9.3% YoY increase)
Boom of IPOs,
M&Aand Private
Placements
Market consolidation – small fish
won't survive
Subscription&Cloudgaming
* - Sources:
- NewZoo
- Deloitte
- Investgame.net
Competitionforusers'attentionbetween
gaming,socialmedia,videoandmusic
platfroms
Asia-Pacific accounts for almost
50% of gaming industry
> USD 200 bln industry by 2023
> 650 deals >USD 40 bln deals' value in
2020*
4. 3
Fundraising basics
Business valuation:
DCF
Market multiples
Deal Multiples (EV/Sales, EV/EBITDA,
P/E)
Other terms and concepts:
Debt vs Equity
VC vs Corporate
SPA/SHA
Earn-Out and Formula
Lockup
Non-compete
Cash-in vs Cash-out
Types of fundraising/exit option:
Private placement
M&A
IPO
Public debt
SPAC
IPO
Direct Listing
PIPE
Convertible
Investment rounds:
Seed / Angels' round
Series A, B
Series C / Pre-IPO
Exit
5. 4
Fundraising/Exit trends
2020-1Q 2021 saw a dramatic surge in all spheres of
fundraising including Private Placement (USD 2.6 bln in
Q1 2021 vs USD 1.4 bln in Q1 2020), M&A (USD 14.9
bln vs USD 4 bln) and IPOs (USD 8.3 bln vs USD 4.9
bln)
Q1 2021 saw spike in financing deals which accounted
for 248 closed deals out of which:
134 deals were private placements
78 deals were M&A
36 deals were IPOs (including SPACs and Direct
Listing)
In Q1 2021 venture segment saw 45 deals worth as
much as USD 226 mln. Key investors are Bitkraft
Ventures and Playventures:
35 are seed deals (average ticket – USD 4.7 mln)
10 are Series A-B deals (average ticket – USD
11.8 mln)
Top 3 M&A deals in Q1 2021:
1. Microsoft - ZeniMax (USD 7.5 bln)
2. Bytedance – Moontoon (USD 4 bln)
3. EA – Glu Mobile (USD 2.1 bln)
Top public deals:
1. Playtika IPO
2. Nexters
SPAC
3. Roblox Direct
Listing
Top Strategic investors:
1. Tencent
2. Embracer
3. ByteDance
4. EA
Sources:
- Investgame.net
6. 5
Case studies
Roblox Direct Listing
Roblox was set up in 2006 and
now comprises millions of user
created gaming universes;
It was one of the key beneficiaries
of pandemic restrictions and
substantially grew its business in
2020;
In January 2021 Roblox raised its
last private round worth USD 520
mln and next month went on
Direct Listing at NYSE;
At first day closing the company
was worth USD 45 bln (currently ~
USD 36 bln);
The company is traded at fantastic
39 P/Sales multiple while still
having negative EBITDA.
1 Nexters SPAC
Nexters is the owner of Hero Wars
franchise and portfolio company of
Playrix;
In Q1 2021 the company
announced SPAC deal at
NASDAQ;
SPAC to be used in the deal is
Kismet Acquisition One Corp.
which was set up by ex-CEO of
Megafon Ivan Tavrin;
In the course of SPAC deal
Nexters raised USD 300 mln out
of which USD 150 were attributed
to existing shareholders and USD
150 mln will be used to fuel
company's growth;
Nexters is valued at USD 1.9 bln.
2 ByteDance coming to gaming
ByteDance is the owner of TikTok;
Several years ago ByteDance decided to
enter new but very lucrative segment of
gaming in an attempt to seize part of
Tencent's gaming pie;
Latest deal executed by ByteDance is
acquisition of Chinese game developer
Montoon for USD 4 bln;
This deal represents example of format
convergence in a fight for attention of
young audience.
3
Core message:
We can offer you a very wide range of products and services – from a full range of asset classes to private lable funds
Talking points: Self-explanatory slide – potentially highlight some of the products and services that the prospect might be interested in