With a $340M Raise, Scopely Becomes One of LA's Most Valuable Startups

Just months after raising $200 million, Scopely is getting investors to open up their checkbook again.

The Culver City mobile game unicorn announced Wednesday it has raised $340 million in Series E funding, making it one of the most valuable tech companies in Los Angeles.

In a sign of how robust the market has been for beneficiaries of the stay-at-home economy, the new round values Scopely at $3.3 billion, which nearly doubles the company's $1.7 billion post-money valuation from March.

The company's success is welcome news to Los Angeles investors who backed Scopely in earlier, cheaper rounds. Greycroft, The Chernin Group and TenOneTen ventures were seed investors, getting in at a $40 million post valuation in 2012. Upfront Ventures, BAM Ventures and M13 got in on the 2018 Series C at a $710 post-money valuation.

Asked how the valuation skyrocketed so quickly, Scopely co-CEO Javier Ferreira said the company has done what early-stage investors love to see: ignite revenue growth.

"We have close to one hundred percent revenue growth year over year," Ferreira told dot.LA. "I think we've also shown our ability not just to buy large scale assets, but to grow those kinds of businesses post acquisition."

Revenue from the company's "Marvel Strike Force" has grown by 50% since Scopely acquired the role-playing mobile game as part of a transaction with Disney's FoxNext Games in January, according to Ferreira.

In April, Scopely acquired PierPlay, the maker of Scrabble GO, which became the biggest word game launch ever. Ferreira said more buying lies ahead.

"The space is moving so fast," Ferreira said. "It's an exciting time to be in the gaming space and we want to have the ability to make transformational moves and bring in teams and products to our ecosystem that will further drive growth."

Ferreira said the company is also developing its own games, but all those acquisitions are expensive, hence the need for the Series E, which was funded by Wellington Management, NewView Capital, Canada Pension Plan Investment Board (CPPIB), BlackRock, D1 Ventures, TSG Consumer Partners, Battery Ventures, Eldridge and Declaration Partners.

The new valuation makes Scopely, which was founded in 2011, one of the most valuable Southern California tech startups, according to Pitchbook data. It trails only SpaceX, which was just valued at $100 billion, and Faraday Future, which was valued at $4.4 billion in 2018 but is now planning to go public through a reverse merger.

Scopely now has 950 employees spread across the globe, but Ferreira says those inside the company do not spend much time thinking about Scopely's meteoric growth.

"We've been kind-of growing so fast for so many years now that, to be honest, it doesn't feel that different from a kind of internal perspective."

As Americans continue to stay home during the pandemic, consumers spent $4.3 billion on video game hardware, content and accessories in September, a 10% increase over a year ago, according to NPD Group. Epic Games, with a $17.3 billion valuation, is still considerably larger than Scopely.