Fornite-owner Epic Games closes in on $28bn valuation after fresh fundraising

LaToya Harding
·Business Reporter, Yahoo Finance UK
·3 min read
An attendee dressed as a Fortnite character poses for a picture in a costume at Comic Con International in San Diego, California, U.S., July 19, 2019. REUTERS/Mike Blake
North Carolina-based Epic Games boasts more than 350 million Fortnite accounts worldwide. The online video game is set in a post-apocalyptic zombie-filled world, and up to 100 players can battle each other in each game. Photo: Reuters/Mike Blake

Epic Games, the owner of Fornite and video chat app Houseparty, is nearing a $28bn (£20bn) valuation as it is close to concluding another $1bn fundraising.

The company is finalising the terms of the fundraising just seven months after closing a previous round, Sky News reported, highlighting its lockdown success.

Epic Games, founded by Tim Sweeney three decades ago, was previously valued at $17.3bn after a $1.78bn capital-raising announced in July 2020. This included a $250m contribution from Sony (6758.T).

Banking sources told the broadcaster this weekend that Bank of America Merrill Lynch is advising Epic Games on the latest transaction.

It was unclear whether any major new investors were backing the $1bn round, which includes a combination of primary and secondary share sales, they added.

BlackRock, private equity group KKR and Fidelity Management and Research are some of the names on the share register.

The raise last year also included participation from David Tepper, the billionaire hedge fund manager who owns the Carolina Panthers NFL team.

North Carolina-based Epic Games boasts more than 350 million Fortnite accounts worldwide. The online video game is set in a post-apocalyptic zombie-filled world, and up to 100 players can battle each other in each game.

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The company has recently been involved in a row with iPhone maker Apple (APPL) after it tried to avoid the 30% fee Apple charges developers on the App Store by launching its own in-app payment system.

In February, it filed a European anti-trust complaint against Apple, arguing that "the very future of mobile platforms" was at stake.

"Consumers have the right to install apps from sources of their choosing and developers have the right to compete in a fair marketplace," Mr Sweeney said. "We will not stand idly by and allow Apple to use its platform dominance to control what should be a level digital playing field.

He added: "It's bad for consumers, who are paying inflated prices due to the complete lack of competition among stores and in-app payment processing. And it's bad for developers, whose very livelihoods often hinge on Apple's complete discretion as to who to allow on the iOS platform, and on which terms."

Apple banned Fortnite from its store in retaliation.

According to a court filing, dated 19 March, Tim Cook, Apple’s chief executive, software chief Craig Federighi and other executives were named on a tentative list of witnesses in the legal case against Epic Games.

App store vice president Matt Fischer and Apple fellow Phil Schiller were also named on the list submitted to the US District Court Northern District of California Oakland Division, Reuters said.

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