Epic Games, developer of the popular video game Fortnite, on Tuesday said it raised $1 billion in a new round of funding that lifts the company's valuation to $28.7 billion.
The Cary, North Carolina-based firm said that $200 million of the fresh cash raised came from Sony, which had initially invested in the company last year. Other investors in the round included Appaloosa, Baillie Gifford and Fidelity. Epic's latest market value represents a 66% increase from what it was worth in a $1.8 billion deal 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.
"Their investment will help accelerate our work around building connected social experiences in Fortnite, Rocket League and Fall Guys, while empowering game developers and creators with Unreal Engine, Epic Online Services and the Epic Games Store."
Sweeney remains the controlling shareholder of the company, Epic said. Credit Suisse and BofA Securities acted as joint placements to Epic in its latest financing round, Epic said, while Wilson Sonsini Goodrich & Rosati provided legal counsel.
Epic is a major player in the video games industry. Its battle royale title Fortnite quickly became a hit when it released in 2017 and is now a cultural phenomenon, with millions of people watching others playing the game on streaming platforms and celebrities and influencers promoting it online.
But Epic is known for more than just Fortnite. The company's Unreal game engine software powers many of the world's top games. It also played a role in the film industry's shift to virtual production during the coronavirus pandemic.
Epic is betting big on the so-called "metaverse," an informal term used to describe a collaborative and immersive virtual world. Fortnite has hosted massive virtual concerts with artists like Travis Scott and Marshmello, for example. Other companies, including Microsoft and Roblox, are also investing heavily in this trend.
And Epic has been expanding into other areas, including PC games distribution 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 British studio behind Fall Guys. That game became an instant hit when it launched last summer, attracting millions of players stuck at home due to Covid restrictions.
Over the last year, however, Epic has mainly drawn headlines due to its legal battle with Apple over the latter's app store policies. Epic tried to avoid Apple's 30% App Store fee through a software update that effectively bypassed the Cupertino, California-based company's own payments system. Apple responded by removing Fortnite from its App Store.
Last week, the two companies laid out in separate filings what they consider to be the key facts and main legal issues ahead of a highly-anticipated antitrust trial that's slated to start next month.
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