SÃO PAULO, Brazil — Over the past nine years, a São Paulo-based startup has built a mobile gaming empire flying under the radar.
Now, Wildlife Studios, which makes games such as Sniper 3D and Tennis Clash, has just been valued at US$ 1.3 billion in a round led by Benchmark Capital, making it Brazil’s most valuable tech company with the widest global reach. Benchmark is paying the highest valuation it has ever assigned to a company in a first investment.
More than 1 billion people around the world have played games developed by Wildlife, for a total of 2 billion downloads. For the sake of comparison: TikTok, the Chinese phenomenon threatening Facebook, has a cumulative 1.5 billion downloads worldwide.
The global mobile gaming market is worth US$ 80 billion a year and is already bigger than PC and console games (such as PlayStation) combined.
Mobile is the filet mignon in the gaming market: while mobile gaming revenues jump 25% a year, PC and console gaming grow only 4%.
The barrier of entry in mobile gaming used to be low. Wildlife started with US$ 100 and two brothers working in their parents’ kitchen. But today, the name of the game is distribution: app stores are packed with competing offerings and making a game stand out and get noticed takes a particular set of skills.
Wildlife is both the developer and publisher of its own games and it is now considering publishing other developers as a service. (It is the publisher who brings the game to market, interacts with app stores and designs strategies to maximize monetization.)
While Victor, 33, takes care of most business decisions, his brother Arthur, 35, is the company’s product manager and handles creative decisions. Wildlife releases about three games a year, which are typically translated in 10 languages and marketed in 120 countries.
The brothers discussed a deal with other VC funds that offered even higher valuations, but Benchmark’s track record made it an obvious choice.
Benchmark partner Peter Fenton will take a board seat. Fenton, one of the world’s most influential tech investors, has cut checks for Twitter, Ebay, Instagram, Dropbox and Snapchat. On average, Benchmark’s investments have risen 10-fold over the past seven years.
Bessemer Venture Partners, which invested in the company back in 2012, also took part in the round.
The mobile gaming market is very fragmented and has not yet produced an iconic company. Giants such as Electronic Arts and Activision Blizzard dominate the console and PC segments but are struggling to get a solid footing on mobile.
Notable transactions in the mobile segment include Supercell’s US$ 10 billion sale to Tencent and Activision’s acquisition of Candy Crush maker King Digital for US$ 5.9 billion four years ago. Farmville owner Zynga is one of the rare listed companies with a US$ 6 billion market cap on the Nasdaq.