Joanna from Edge Investment Group is joining us at Game Connection Europe 2016 this year to speak about private investment.
We spoke to Joanna recently about her upcoming talk and what she is looking for at GCE16 in October.
Investments in gaming exploded in the past year, what can you tell us about this? Except VR where money is pouring, do you see a specific trend where investors like to put their money?
The games industry has undergone a substantial transition. The UK market, for example, is worth over £2.7bn (excluding hardware sales) and is expected to grow to £4bn by the end of this year. There are a lot of opportunities to unearth.
Technology has been a key driver. With the growing ubiquity of smartphones, which puts entertainment and media in the hands of almost everyone, games are now available 24/7. The introduction of smart phone platforms and improved broadband connectivity has reduced barriers to entry – so this is a rich hunting ground.
Investors are really looking for two things: high growth and exit potential. We want to meet ambitious management teams who can really deliver within trending sectors such mobile gaming, development of ‘brands’ and gaming analytics.
When it comes to investing in smaller companies and independent studios, are things really different?
In some ways it’s similar to investing in businesses across all sizes and stages of growth. Investors will be looking for an attractive investment prospect (strong management team, attractive business model, high growth potential & route to exit), these are common across all sizes and stages of growth (and indeed sectors).
There are some differences though. Smaller companies are likely to need more strategic mentoring/advice than more established companies. Companies like Edge help put them in touch with world-class contacts and investees become part of our network irrespective of their size or age.
Some studios have great ideas but no track record. What’s their chance to raise funds? Why would an investor put their money on the table?
This depends on the investor’s risk appetite, what their profiles are and what kind of companies they are looking for. For us at Edge, we look for companies with proven management teams, existing revenues, the capability to scale rapidly, a total capital requirement that fits our investment approach - and above all strong creativity.
What about Edge Investments? Can you tell us why gaming is of interest for you? You’ve invested in quite a few already like deltaDNA or Coolabi. Why them? What have you learned for your future investments?
Ultimately we’re looking to invest in companies with creative IP and we see gaming as one of the most exciting areas of the sector due to its high potential for international scalability.
Our current investments expose us to several different areas in the games sector – Coolabi focuses on producing IP for children, initially for TV and then other areas of IP exploitation such as gaming. DeltaDNA meanwhile focuses on gaming analytics; for example, how does a customer interact with gaming portals? How do you monetise players? It’s incredibly valuable to a games company to understand consumer behaviours to maximise monetisation.
You’ll be on the look for interesting companies to invest in at Game Connection. Can you tell us more on what you’ll be looking for?
For us at Edge, we’re really looking for dynamic and ambitious management teams with a clear vision and high growth potential based in or around the UK. And the UK remains one of the most creative and innovative countries for game and game-associated development with truly world-class game engineers. Our investment approach is simple: we will be looking for experienced management teams with a convincing ability to execute, who have existing revenues, the ability to scale and grow rapidly, and a total capital requirement of £1m-£5m in current round.