As expected Zynga has filed for an initial public offering (IPO), which the firm hopes will raise about $1 billion.
According to the Wall Street Journal, the FarmVille and CityVille maker is ultimately expected to offer up to ten per cent of its shares at a valuation near or above $20 billion.
As a private company, Zynga does not publish its finances, but the IPO shows it swung to a $90.6 million profit last year, while revenue roughly quadrupled to $597.5 million. As of the end of March, Zynga had $995.6 million in cash.
Having made 14 acquisitions in the last 12 months alone, the San Francisco-based firm now has more than 2,000 staff.
Zynga’s filing said proceeds of the offering will mainly be used for general expenses, including the development of games and marketing. It also revealed that its games, most of which are played through Facebook, attract 232 million monthly active users across 166 countries.
CEO Mark Pincus said: “By offering our shares to the public we hope to enable Zynga to invest more in play than any company in history. To accomplish this, we will continue to make big investments in servers, data centres and other infrastructure so players’ farms, cities, islands, airplanes, triple words and empires can be available on all their devices in an instant.
“We will also continue to fund the best teams around the world to build the most accessible, social and fun games.”
Sources: New York Times / SEC filing
Comments
3It's great that Zynga are doing well and all, but I can't help wondering if they are expanding too fast. I doubt this kind of growth can be sustained.
Yeah, I can't help thinking that social games are in a massive bubble that is about to go pop. Zynga has been making a lot of money right from its earliest days but for the long term I think they have to start making games that start really developing on the social game template. They have been getting awfully samey.
It's worse than 'samey' - the mechanics of these games are identical, from Farmville to Frontierville to Empires and Allies. The social aspect is forced as well, with constant pop-ups nagging you to interact with your friends rather than having such things built in to the gameplay. I don't know if this is a failure on behalf of the developers or a limitation of the platform, though.