Fortnite is printing money for Epic Games, and we're not talking about V-bucks. According to Nielsen's video-gaming research company SuperData, Fortnite surpassed $1.8 billion in revenue in 2019 and was the highest-grossing game that year. The final numbers are likely to be even higher in 2020 as it was reported Fortnite grossed $400 million in April alone due to the pandemic.
The success of Fortnite has catapulted founder and CEO Tim Sweeney onto the Forbes World's Billionaires list with an estimated net worth of more than $5 billion. It's understandable many are holding out hope the stock will debut on the public markets soon and are paying close attention to any corporate action that could signify an upcoming IPO or SPAC.
That's why a recent hire for the company is raising eyebrows.
Image source: Getty Images.
An epic investor relations hire
The newest hire kicked off a media feeding frenzy. Bloomberg Technology columnist Tae Kim first spotted the privately held company had hired an investor relations specialist. This was surprising because, to date, Epic Games has been discerning on its funding rounds and has chosen to take money from strategic investors rather than purely financial backers.
Conversely, an investment relations specialist tends to be a hire for public companies as the role communicates frequently with purely financial backers like fund (hedge and mutual) managers and other various large buyers of public stock. The unsurprising knee-jerk assumption regarding this hire was Epic Games is planning on following video-gaming peer Roblox in going public.
As a private company, Epic Games is under no obligation to release information related to funding but press releases and other publicly available data confirm the company has taken only three rounds of funding since 2012. All told, Epic has raised $3.4 billion in funding, with the August 2020 raise of $1.75 billion being the largest.
As of the last round of funding, Epic Games had a post-money valuation of $17.3 billion. Millennial Money has a deeper dive on Epic Games stock, including what public company owns 40% of Epic Games that you can buy right now!
Epic Games changes its tune... slightly
An Epic Games spokesperson responded to an inquiry from video gaming fan site Shacknews related to the IR hire:
It's fairly common for companies of our size to hire people to help broaden and deepen relationships with existing investors and build new relationships. Epic is always monitoring the market and is prepared to consider opportunities as they arise, but right now we are focused on investing in our business, executing against our opportunities and delivering value to our investors.
Epic Games might bill this as a fairly common hire, but the rest of the communication represents a slight change of tone from Sweeney's long-term boilerplate answer that the company has no plans to go public.
If Epic Games decides to go public, it's likely the company will be one of the hottest IPOs in 2021. Fortnite has become a cultural rite of passage and is quickly becoming a lifestyle brand for its massive 350 million user base. Last year rapper Travis Scott made $20 million for a 9-minute digital concert on Fortnite.
For a breakdown of the funding rounds, corporate backers, and a deep look into the risks and potential opportunities of this high-interest videogaming stock, check out the Epic Games stock deep dive on Millennial Money.
