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Epic Games Gets $1.25 Billion Investment From KKR, Six Others

Epic Games, creators of the Unreal Game engine used for developing video games and popular battle royale title “Fortnite,” received a $1.25 billion investment from more than a half-dozen investment firms, the company announced Friday.

KKR, ICONIQ Capital, Smash Ventures, aXiomatic, Vulcan Capital, Kleiner Perkins, and Lightspeed Venture Partners investment in Epic will create “powerful partnerships with highly strategic investment firms and individuals at the forefront of technology, entertainment, professional sports, esports, and live events,” according to the company.

The seven investors join Tencent, Disney, and Endeavor as minority shareholders in Epic, which continues to be controlled by founder and CEO, Tim Sweeney.

“We’re excited to partner with the finest minds in the financial, sports, and entertainment communities. This reinforces Epic’s position of leadership in real-time 3D technology, and accelerates our ability to improve the way people play, work, and interact with the world,” said Sweeney.

Tencent purchased about 40 percent of Epic Games with a $330 million investment in 2012. The acquisition led to Tencent appointing two representatives to the Epic board of directors. It’s unclear if this latest investment led to a change in the board’s makeup. That 2012 investment led to a number of high profile people leaving Epic Games including “Gears of War” producer Rod Fergusson, Cliff Bleszinkski, and Epic Games president Mike Capps.  It also had a fundamental impact on the way the company developed and released games, which in turn led to the development of “Fortnite” and eventual inclusion of the battle royale mode which pushed the company’s value into the billions.

“Epic Games has fundamentally changed the model for interactive entertainment under the company’s visionary leadership,” said Ted Oberwager of KKR. “Alongside a special group of investors, we are thrilled to support Epic’s dedicated employees and the passionate community of players and developers that lies at the heart of everything that Epic Games does.”

The Raine Group and Guggenheim Securities, LLC are acting as financial advisors to Epic Games. Smith Anderson is acting as legal advisor to Epic Games.

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