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Game developer Niantic, Inc. — the company behind the massively successful Pokemon Go mobile title — has raised $245 million in Series C financing led by venture capital and growth equity firm IVP, with additional strategic investment from aXiomatic Gaming, Battery Ventures, Causeway Media Partners, CRV and Samsung Ventures.
The new financing, unveiled Wednesday morning by Niantic, brings the company’s valuation to nearly $4 billion.
aXiomatic Gaming has previously invested in the growing business of e-sports. The company was one of a group of financial backers that made a nearly $1.25 billion investment in Fortnite makers Epic Games last October and also acquired controlling interest of e-sports league Team Liquid in September 2016.
“There is a lot of expertise there that we think will be helpful as we grow our business, which has this amazing live event component to it. It’s something we had a great year with [in] 2018 and we’re looking to grow in 2019,” John Hanke, co-founder and CEO of Niantic, told The Hollywood Reporter of his partnership with aXiomatic.
Such events held by Niantic included last July’s Pokemon Go Fest in Chicago, which drew 21,000 gamers to the city’s Lincoln Park.
“We have our own take on social gaming and live events, which is not e-sports in the sense that most people think of it,” Hanke said of the potential for Niantic to move into the e-sports realm. “For our own flavor of events we’re looking at how we can expand those and grow those, and perhaps there may be some competitive element to those in the future but that’s not our primary focus.”
In September, Niantic’s Pokemon Go crossed the $2 billion revenue mark, just over two years after its initial release in July 2016. Profits are driven by the game’s optional in-game microtransactions.
As for future plans for the app, Hanke said, “We just completed our big launch in Q4, which was our trainer dueling feature, which lets people play one-on-one. We’re really excited to build around that this coming year. We’re looking to deploy some of the advanced AR technology that we showed off last summer. We have some work that will be making its way into Pokemon Go based on that technology.”
Niantic is currently working on its next mobile game, Harry Potter: Wizards Unite, with Warner Bros.’ WB Games division. It’s expected to launch sometime this year. Similar to Pokemon Go, Wizards Unite is a free-to-play AR game that interacts with the real world as players move around their actual surroundings.
“Clearly it’s a big part of our plans for the year and I think it’s an exciting opportunity for investors,” Hanke said of the upcoming game.
Niantic will use its new capital to accelerate staffing for initiatives such as the Niantic Real World Platform, the engine that powers the company’s current slate of titles that utilize AR into their gameplay. In December, the company invited developers to apply for the Niantic Beyond Reality Developer Contest, a competition that allows access to their engine and a prize pool of up to $1 million. Niantic also promised that the platform will eventually be made widely available to developers around the world.
“The whole idea behind the platform is to tap into small indie developers, creative teams out there who are going to have, I think, great ideas about how to build real-world games and help this new genre,” Hanke said. “We are looking for games we can publish and that will expand our business.”
Speaking to Niantic’s priorities between adapting well-known third-party IP like Pokemon and Harry Potter or developing their own titles, Hanke said, “We’re trying to strike a balance. We have some other projects based on equally huge blockbuster IP that we haven’t announced yet that are coming. But we’re also invested in creating new games and stories from scratch. That’s something that is near and dear to our hearts.”
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