Kabam valued at $700 million after secondary financing
After a huge 2012, Kabam is primed to make a big splash in coming months. According reports, the social gaming giant is now valued at $700 million after a private sale of $38.5 million in common stock. The company also reported that it reached $180 in revenues in 2012, up 70 percent year to year.
This secondary offering is said to be done for the benefit of Kabam employees. Typically, private companies use an IPO for employees and investors to sell their shares. This secondary offering keeps the company operating privately but provides liquidity to people interested in selling their shares. Company CEO Kevin Chou added, “None of the new investment is going to Kabam… It’s all going to employees who wish to sell their shares, and it’s of course a voluntary program.”
This high valuation comes in spite of the company laying off a small number of employees late last month. The company did say that it took steps to repurpose the employees affected, but had to let go of an unfortunate few. It is not looking to downsize, but instead refocus its efforts by making mobile a priority. It looks to boost its employee count from 700 to 900 by the end of the year.
Kabam is being especially strategic by balking at an IPO. With talks of King planning for an IPO this year and the incredibly disappointing Zynga offering, Kabam does not want to make its way down a similar path. Though the company had three games ranked in the top 25 grossing apps on both iOS and Android at the end of 2012, it seems to be in no rush to go public.