Zynga files for $1 billion IPO
Farmville developer expected to raise $20 billion valuation
Farmville developer Zynga filed for an initial public offering worth $1 billion on Friday, after a week of rumour and speculation. As it stands, the company is expected to secure a $20 billion valuation.
The IPO filing revealed that last year, Zynga made $598 million in revenue, and another $235 million in Q1 of this year. Both figures show massive rises up 391 per cent and 133 per cent respectively. Zynga's profits for last year come in at $90 million.
As well as its financials, the Zynga filing also exposed more detail about the developer's player numbers. Zynga owns some of the most popular Facebook games, including Farmville, CityVille and Empires & Allies, all of which contribute to 148 million monthly unique users.
"By offering our shares to the public we hope to enable Zynga to invest more in play than any company in history," states Mark Pincus, CEO, in the filing. "To accomplish this, we will continue to make big investments in servers, data centers and other infrastructure so players' farms, cities, islands, airplanes, triple words and empires can be available on all their devices in an instant."
"While I'm humbled by the size of the audience we enable to play today, we're just getting started. We're thinking every day how much more accessible, social and fun our games can get."
The SEC filing will make Pincus a billionaire if the expected $20 billion valuation is achieved. His 112 million shares will be worth around $3.6 billion. Other investors, like LinkedIn founder Reid Hoffman, who owns 3.1 million shares in the social gaming developer, also stands to do well.
In a piece on Gamasutra Arvind Bhatia, Sterne Agee, analyst compared how the Zynga offering stacks up against some of the industry's big players, and predicted that while Activision has a 6X multiple and EA has 11X, but if Zynga scores the $20 billion valuation and it has a 46X multiple.
In the filing, Pincus also spoke about the future of Zynga, and compared it to other successful online companies.
"My kids decided a few months ago that peek-a-boo was their favorite game. While it's unlikely we can improve upon this classic, I look forward to playing Zynga games with them very soon," he said.
"When they enter high school there's no doubt that they'll search on Google, they'll share with their friends on Facebook and they'll probably do a lot of shopping on Amazon. And I'm planning for Zynga to be there when they want to play."