This illustration image shows a person waiting for an update from Epic Games’ Fortnite on their smartphone in Los Angeles on August 14, 2020.
Chris Delmas | AFP | Getty Images
Epic Games, developer of popular video game Fortnite, said Tuesday it raised $ 1 billion in a new round of funding that brings the company’s valuation to $ 28.7 billion.
The Cary, North Carolina-based company said $ 200 million of the money raised came from Sony, which originally invested in the company last year. Other investors in the round were Appaloosa, Baillie Gifford and Fidelity. Epic’s latest market value represents a 66% increase from its $ 1.8 billion value last year.
“We are grateful to our new and existing investors who support our vision for Epic and the Metaverse,” said Tim Sweeney, CEO and founder of Epic Games.
“Your investment will help accelerate our work building connected social experiences in Fortnite, Rocket League and Fall Guys, as well as supporting game developers and developers with Unreal Engine, Epic Online Services and the Epic Games Store.”
Sweeney remains the company’s controlling shareholder, Epic said. Credit Suisse and BofA Securities acted as joint placements for Epic in their latest funding round, Epic said, while Wilson Sonsini Goodrich & Rosati served as legal advisor.
Epic is a major player in the video game industry. The battle royale title Fortnite quickly became a hit when it was released in 2017 and is now a cultural phenomenon. Millions of people watch others play the game on streaming platforms, as well as celebrities and influencers promoting it online.
But Epic isn’t just known for Fortnite. The company’s Unreal Game Engine software powers many of the world’s best games. It also played a role in moving the film industry to virtual production during the coronavirus pandemic.
Epic relies heavily on the so-called “metaverse”, an informal term that describes a collaborative and immersive virtual world. Fortnite, for example, has hosted massive virtual concerts with artists like Travis Scott and Marshmello. Other companies, including Microsoft and Roblox, are also investing heavily in this trend.
And Epic expanded into other areas, including distributing PC games with its Epic Games Store – a rival to Valve’s Steam – as well as new content. Last month, Epic announced it had bought Mediatonic, the UK studio behind Fall Guys. This game became an instant hit when it was released last summer and attracted millions of players stuck at home due to Covid restrictions.
Last year, however, Epic made headlines largely because of its litigation with Apple over its App Store policies. Epic attempted to avoid Apple’s 30% App Store fee with a software update that effectively bypassed the Cupertino, California-based company’s own payment system. Apple then removed Fortnite from the App Store.
Last week, the two companies set out in separate documents what they believe are key facts and key legal issues ahead of a highly anticipated antitrust proceeding due to begin next month.