High-profile entertainment-industry investors Eric Garland and Evan Richter have just announced a $75 million fund for media, entertainment, and games, with Epic Games as one of the select companies Smash Ventures has chosen to invest in. In an interview with GamesBeat, the duo has explained what’s so different about Epic Games, and why they’re choosing to invest in it.
The pair’s relationship with Epic Games goes back six or seven years when both were working in venture investments for Disney. A conversation with Pixar co-founder Ed Catmull led to Garland and Richter looking for companies that developed game engines, which led them to Epic. “We put out just a handful of cold calls,” Garland said. “One of them was a totally cold email. I think we guessed Tim Sweeney’s email address. He responded.”
The pair initially invested in Epic on Disney’s behalf, but later reconnected with Sweeney while putting their own company Smash Ventures together. “We connected with Tim, caught up, and he said, ‘I’m putting a round together. Would you like to participate?’ It was a privilege to get to do that,” Richter explained. “That was our first investment, and there have been many since then, but it started all at that time.”
Thanks to these pre-existing relationships, Smash Ventures was able to be a “big part” of the $1.25 billion funding Epic raised in 2018. As for why Epic is such an attractive investment, Garland and Richter say it’s all about games evolving from single entertainment titles to all-encompassing platforms.
“Eric and I share a thesis around gaming, which is that gaming is the next social network,” Richter explained. “Gaming companies have moved from a studio-driven model to a platform model. That shift has occurred over the last several years. A lot of investors may have been slow to that: ‘Game companies are media businesses. They’re hit-driven. They’re hard to figure out.’ All the while people like Tim Sweeney and the guys at Roblox have recognized that these are closer to true platforms.”
While Smash Ventures is investing in a variety of businesses outside entertainment, its definitely looking to do more in the gaming space. The firm is looking to keep its investments focused on a small number of companies, but it’s likely we’ll see more game-related companies among their ranks before long.
GameSpot may get a commission from retail offers.
Credit: Source link