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Tencent invests $90 million in Pocket Gems

The new investment from the Chinese giant values the mobile developer at about $500 million

China's Tencent Holdings, which owns a majority stake in Riot Games and Supercell, as well as minority stakes in Epic Games, Robot Entertainment and others, is continuing to expand its rather massive global gaming footprint by investing $90 million in mobile developer Pocket Gems.

Pocket Gems was founded in 2009 and employs about 200 people in San Francisco. The sizable investment will be used to support "major expansions for the Episode and War Dragons communities, as well as the upcoming launch of a new studio building 3D synchronous multiplayer mobile games for hardcore gamers." Pocket Gems said that it's aiming to launch its new studio and its first title from that studio later this year.

The investment follows an earlier one from Tencent when it bought about 20% of Pocket Gems for $60 million. This latest funding values Pocket Gems at roughly $500 million and brings Tencent's stake up to 38%. It also comes during a period of growth for Pocket Gems, which said that it reached all-time highs in both players and gross bookings in 2016. War Dragons, in particular, has enjoyed a good deal of success. It was one of the first synchronous multiplayer 3D games on mobile and managed to triple its player base year-over-year, with close to 2 billion battles fought in 2016.

"Tencent is happy to reaffirm our long term support for our strategic partner, Pocket Gems," said Steven Ma, Senior Vice President of Tencent. "We admire their history of focusing on top talent to create innovative new products that can delight users, and look forward to a bright future ahead."

"We're excited to build on our partnership with Tencent, whose unmatched strength in games will help us become one of the great developers of mobile games and interactive entertainment in the world," said Ben Liu, CEO of Pocket Gems. "We're still in the early days of mobile, and our pioneering team is eager to continue pushing the boundaries of what's possible. The best is yet to come."

Despite large investments, Pocket Gems remains independent. Tencent's backing is complemented by a minority backing from Sequoia Capital as well. "The Pocket Gems team has built an incredible company," said Jim Goetz, partner at Sequoia Capital. "Pocket Gems stands alone as the only independent game developer in the world with two entirely different top 50 category-creating titles, Episode and War Dragons."

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