SAN FRANCISCO--(BUSINESS WIRE)--The valuation of privately-held Kabam has risen to $700 million, putting the company in the top echelon of the world’s free-to-play games companies. Kabam announced that a small group of investors launched a secondary offering for common stock that will enable current and former employees to sell their shares to these investors.
A secondary offering of this nature demonstrates an unusual commitment to employees of a privately-held company. Traditionally, most private companies use an IPO as the only way to offer employees and investors a way to realize the value of their stock. A secondary offering is a way to provide liquidity while the company continues to operate privately.
Kabam Co-Founder and CEO Kevin Chou said, “I strongly believe that all Kabam talent should share in the value that they are creating for our company's shareholders, including themselves. In the last 12 months, Kabam has launched North America's most successful game publishing and platform business, bringing over 20 high quality titles to market. In addition, our own studios have created the world's number one mobile racing game, Fast and Furious 6: The Game. Our talented employees are the ones making these efforts so successful.
“None of the new investment is going to Kabam,” Chou said. “It’s all going to employees who wish to sell their shares, and it's of course a voluntary program.
“Financially, Kabam is remarkably solid,” Chou said, adding Kabam has long been running profitably with positive cash flow, has more than $50 million of cash in the bank and expects to grow revenues to more than $300 million this year. The company is beating all of its targets for games developed by Kabam Studios, as well as third party games published by Kabam Publishing, Chou said.
“Kabam is focused on the long term and we are motivated to build the next great entertainment company. While we're building for the long term, we wanted to find a way to enable employees to enjoy some financial benefit today from the equity portion of their compensation. The secondary offering is a terrific way to do this.”
Kabam is not naming the companies that funded the secondary offering, although it said several current investors as well as a number of new investors are participating.
Kabam’s revenue has grown steadily—more than 70 percent in 2012 and the company expects more than 65 percent growth this year—as the company has transformed in less than four years from one strategy game on Facebook to multiple genres of games on multiple platforms. Today, Kabam is the leading publisher of third party free-to-play titles with more than 20 games created by other developers available. A majority of Kabam’s revenue comes from games on mobile devices as the company has three games in the top 15 grossing applications on iOS and Android. Popular titles include The Fast & Furious: The Game, The Hobbit; Kingdoms of Camelot, which, at gross revenues of more than $200 million, is one of the top ten strategy franchises of all time, and Dragons of Atlantis.
About Kabam
Kabam is the leader in the western world for free-to-play core games with first and third party published titles available on mobile devices via the Apple Store, Google Play, and on the Web via Facebook, Yahoo, Kabam.com and other platforms. In 2012 Kabam revenues grew by 70 percent to more than $180 million. The company is profitable and has seven titles that gross more than $1 million per month. Kabam’s Kingdoms of Camelot franchise has grossed more than $200 million in less than four years, making it one of the top 10 strategy franchises of all time. In 2012, Kabam Publishing was launched to provide third-party developers access to Kabam’s technology platform, distribution channels, data analytics and best practices that Kabam’s in-house development teams use to bring wildly successful games to players worldwide. Kabam has approximately 700 employees across three continents, with corporate headquarters in San Francisco. The company's investors include Google, Warner Brothers, MGM, Intel, Canaan Partners, Redpoint Ventures, Pinnacle Ventures and others. More information about Kabam can be found at www.kabam.com.
THIS NEWS RELEASE DOES NOT CONSTITUTE AN OFFER TO BUY OR A SOLICITATION OF AN OFFER TO BUY OR SELL ANY SECURITIES OF KABAM. ALL PERSONS THAT HAVE RECEIVED OFFER MATERIALS RELATED TO THE OFFER TO PURCHASE SHARES DESCRIBED HEREIN SHOULD REVIEW SUCH MATERIALS CAREFULLY, AND CONSULT WITH THEIR OWN FINANCIAL AND TAX ADVISORS BEFORE DETERMINING WHETHER OR NOT TO SELL THEIR SHARES. KABAM MAKES NO RECOMMENDATION AS TO WHETHER ANY PERSON SHOULD SELL HIS OR HER SHARES IN CONNECTION WITH THE OFFER.