Social casino game maker Huuuge will raise $150 million in Warsaw IPO

Monday 18th January 2021

Social casino game maker Huuuge said it will go public in an initial public offering on the Warsaw Stock Exchange. The company expects to raise $150 million.

Though a latecomer in the segment, Huuuge found its niche in targeting younger players. It focuses on live operations, or frequent updates such as tournaments to keep players coming back.

The company is taking advantage of a big window in gaming IPOs. Playtika went public at an $11.4 billion last week. If you talk about exit deals, or both acquisitions and IPOs, the total value hit $11.6 billion for 158 transactions, according to market analyst InvestGame. The biggest were Zynga's acquisition of private Peak Games for $1.8 billion and Tencent's acquisition of Leyou Technologies for $1.4 billion. Activision Blizzard raised $2 billion in senior notes (a form of debt)

The maker of free-to-play social casino mobile games said it has 4.74 million monthly active users as off September 30, 2020, up from 3.98 million at the end of 2019. CEO Anton Gauffin started the company in 2015.

Huuuge has seen its revenues grow at a compound-annual-growth rate of 30.6% from $152.1 million in 2017 to $259.4 million at the end of 2019.

In the same period its consolidated adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) increased from a loss of $4.3 million to $24.8 million.

For the nine months ended September 30, 2020 Huuuge generated consolidated revenue of $243.5 million compared to $187.3 million for the nine months ended September 30, 2019, reflecting a year-to-year growth of 30.0%.

In the same period Huuuge's consolidated adjusted EBITDA increased to $54.2 million from $9.3 million. The company's games include Huuuge Casino and Billionaire Casino. Huuuge operates through three main divisions, Mighty, Brave and HuuugeX. These divisions

manage Huuuge's internal and external studios and its games, while growing the Huuuge portfolio. They are responsible for the Company's core offering of games within the social casino subgenre (Mighty), for casual games through publishing deals (Brave) and for innovative new generation casual games (HuuugeX).

Gauffin said in a statement that Huuuge has pioneered massively multiplayer gaming in its social casino franchises, with a focus on keeping players engaged. After its initial success, the company is now diversifying its portfolio.

Huuuge currently has multiple games at various stages of maturity in its portfolio, including, among others: social casino games such as Huuuge Casino, Billionaire Casino, Stars Slots, and Huuuge Bingo Saga; casual games, such as those under the Coffee Break Games label,

Traffic Puzzle, Transport it, Trolls Pop and Luna's Quest Bubble Shooter; and games in the early stages of development such as Arena, Rogue Land, Arrows & Empires and Solitaire TriPeaks: Adventure Journey.

In the IPO, a number of investors and the company will sell shares. Those selling include Big Bets OÜ (Anton Gauffin, founder and CEO), RPII HGE (an entity controlled by The Raine Group), Naver KIP Cheer up Gamers Fund, Korea Investment Global Contents Fund (funds managed by Korea Investment Partners), Seoul Investment Patent Venture Fund, Seoul IP Growth Industry Venture Fund (funds managed by Seoul Investment Partners), and Woori Technology Investment. Gauffin plans to retain a significant share of the company still.

Huuuge will use the money for acquisitions and investments, as well as ongoing operations. Gauffin currently holds 42% of the voting rights at the company. The company said it ranks among the top 10 companies in the multibillion-dollar social casino gaming market. The company has more than 600 employees across 10 offices.

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