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Hah. I have wondered about this particular one a fair bit. First, it seems there is just not market for their product that could possibly support the valuation

Hah. I have wondered about this particular one a fair bit. First, it seems there is just not market for their product that could possibly support the valuation in the near future. Second, by virtue of already being so large a company, there is no room for evaluation of new small projects that would change direction. Anything must immediately have enough potential to generate millions in revenue. Runway is maybe 5 years, so they got until then to produce enough revenue to raise more funding or become profitable. IIRC they sold approximately 50% of the company for the 500M round. Maybe I got this one completely wrong, but I just don't see how this can go well. What an incredibly inefficient allocation of capital for the ecosystem. Imagine giving 100 teams 5M each instead.

leesalminen 7y ago
> Imagine giving 100 teams 5M each instead. In 2014 I took $250k as an investment and turned it into ~100x that (in cash) in 2017 with a SaaS product. At the time, VCs said it was “too risky” and so we turned to people in our industry for the investment cash. VCs are funny.
- deleted 7y ago
  [deleted]
- techslave 7y ago
  just because you succeeded doesn’t mean it wasn’t risky.
- grepthisab 7y ago
  Respectfully it may have been above their risk tolerance, and of course you being successful with it doesn't make it a prudent investment. That's the "I won the lottery so everyone should have played the lottery" thing.
- skellera 7y ago
  As the other person said, doesn’t mean it wasn’t risky. But also, people in your industry may have been in a better place to assess that risk.
xR172 7y ago
Hmm, don’t they also have an enterprise/Defence sector? I imagine that would generate more stable revenue It seems natural that they video games business is pretty spikey in terms of revenue, although it’s worrying there isn’t a AAA game that’s using their technology yet, seems still unproven.
- hummel 7y ago
  Wrong, they never delivered anything to anyone. I got insider sources.

leesalminen 7y ago

> Imagine giving 100 teams 5M each instead. In 2014 I took $250k as an investment and turned it into ~100x that (in cash) in 2017 with a SaaS product. At the time, VCs said it was “too risky” and so we turned to people in our industry for the investment cash. VCs are funny.

deleted 7y ago
[deleted]
techslave 7y ago
just because you succeeded doesn’t mean it wasn’t risky.
grepthisab 7y ago
Respectfully it may have been above their risk tolerance, and of course you being successful with it doesn't make it a prudent investment. That's the "I won the lottery so everyone should have played the lottery" thing.
skellera 7y ago
As the other person said, doesn’t mean it wasn’t risky. But also, people in your industry may have been in a better place to assess that risk.

xR172 7y ago

Hmm, don’t they also have an enterprise/Defence sector? I imagine that would generate more stable revenue It seems natural that they video games business is pretty spikey in terms of revenue, although it’s worrying there isn’t a AAA game that’s using their technology yet, seems still unproven.

hummel 7y ago
Wrong, they never delivered anything to anyone. I got insider sources.