Unity Technologies, a private video game development company based in San Francisco, has agreed to a hefty $400 million investment by private equity investment firm Silver Lake in its latest funding round.
The 2004-born gaming toolmaker is the mastermind behind the core software of Pokémon Go and other popular games and apps: its engine reportedly underpins the frameworks of 2.4 billion gadgets. The company has also been a big endorser of virtual reality experiences, fueling 70% of augmented reality experiences.
The investment is almost a 400% markup from the $181 million Unity raised last July: since then Unity's valuation has almost doubled from $1.5 billion to $2.6 billion- this is without taking into account the recent Silver Lake investment.
A large portion of the investment (around $200 million) will be channeled towards cashing out early investors along with Unity's 1400 long-term employees. CEO John Riccitiello reportedly said that it "makes sense to let employees buy cars." Riccitiello said the remaining founders, David Helgason and Joachim Ante, still hold a significant amount of stock and the employees still hold a majority share of the company. What's more is that Silver Lake's managing director Egon Durban, the principal negotiator for the deal, will be joining Unity's board of directors.
The newly forged relationship between Silver Lake and Unity in cohesion with its extremely transparent software that runs on almost any game platform has positioned the company to become a pioneer in not only the gaming world but also other fields of technology. Unity's penchant for spatial computing opens up an array of avenues in terms of our daily digital interactions: shopping online may now evolve into being able to stare into a tangible mirror and observe what clothing looks like through 3D mapping.
Most importantly, Unity has now established itself as a tech giant of sorts. In doing so, the company has formed particularly pertinent and strong connections in the tech industry with big names like Apple, for whom Unity was the first to launch development support when the iPhone was released. More than two-thirds of all content created for virtual reality employs Unity's engine. 91% of applications on emerging augmented reality platforms like the Microsoft HoloLens are generated on the engine, while Samsung's Gear virtual reality has about 90% of its gaming titles developed through Unity.
Unity's business model and development strategy is unique in that it is targeting a market that not only has unlimited growth potential, but is also untapped: the immense level of expertise and innovation that Unity harbors is unmatched in the field of tech and it therefore has the advantage of capitalizing upon a market for AR and VR that has little competition. The immense potential that Unity has is highlighted by Silver Lake's faith in the company, as well as the success of other digital companies that are built upon the same premise of adaptable engineering as the main goal: AutoDesk, Photoshop and Adobe are all timeless and flexible brands because they invented their own respective industries.
What remains to be seen is how Unity changes not only the gaming world but also the real world with its creations.
- https://www.nytimes.com/2017/05/24/business/dealbook/unity-technologies-400-million-funding-round-pokemon.html?ref=business&mtrref=www.nytimes.com
- https://techcrunch.com/2017/05/23/unity-whose-software-powers-half-of-all-new-mobile-games-lands-400-million-from-silver-lake/
- https://techcrunch.com/2017/05/25/with-new-realities-to-build-unity-positioned-to-become-tech-giant/
- https://venturebeat.com/2017/05/25/why-unity-was-able-to-raise-400-million-at-a-2-6-billion-valuation/
- https://www.wsj.com/articles/game-engine-unity-raises-181m-series-c-hits-1-5b-valuation-1468422602
