Unity valuation of $1.5bn seems "appropriate" - SuperData

Unity's momentum in the last couple years has been impressive. Not only has the firm helped to push the democratization of game engines (its own and by influencing its competitors), but it's also become the go-to engine of choice for many indies - there are about 4 million developers with registered Unity accounts, and 30 percent of the top 1,000 grossing mobile games are made using Unity. Now it appears that Unity is one step closer to an IPO. Bloomberg reports that the company is about to land a new investment that would value the company at $1.5 billion.

"The gaming software maker's fundraising, which is expected to close within weeks, would provide it with added resources at it looks to take advantage of the increased interest in virtual reality, said the people, who asked not to be identified because the discussions are private," Bloomberg said.

Unity isn't commenting, and the company doesn't disclose its revenues so it's hard to figure Unity's actual worth, but analysts that GamesIndustry.biz talked with believe the numbers make sense.

"The $1.5 billion valuation for Unity is appropriate. The overhaul of Unity as a firm following the appointment of [CEO John] Riccitiello has allowed it to come into its own, servicing a broader range of entertainment firms and play a more integral role in the overall industry. While VR is in its infancy, Unity has managed to take an aggressive lead, allowing it to grow even further over the next few years. And with Amazon deciding against acquiring them, and license CryEngine instead, Unity is on a clear path towards an IPO," commented SuperData's Joost van Dreunen.

Wedbush Securities' Michael Pachter agreed, noting, "[Unity's] broad reach has a lot of value. They brought Riccitiello on to add gravitas to the management and to allow them to deal with sophisticated investors. If they are actually getting an investment at this level from a sophisticated investor, you can be sure that the investor did his homework and determined that the valuation is fair. Unfortunately, as a private company, Unity doesn't have to share its financials with guys like me. Fortunately for private equity investors, they have to open their financials when seeking investments, so it's likely that the investors saw something there that they liked."

Unity is definitely taking a leadership position on VR. The company hosted the Vision Summit in February, which former Epic Games president Mike Capps described as "probably the most energetic conference I've been to in years," and more importantly, 16 of the initial 30 games available for the Oculus Rift were built with Unity and the company seems to have a strangehold on mobile VR as 90 percent of the games made for Gear VR are Unity-based as well.