Unity Valued at 13.6B After Successful IPO

After initially filing their S1 documents in August, today Unity successfully launched their IPO, or Initial Public Offering, now trading under the symbol U on the NYSE. The per share value opened at $52, giving Unity an initial valuation of $13.6B US. Unity actually left a bit of money on the table with the IPO, choosing to personally direct sales of shares instead of the traditional route of handing that responsibility over to the bank. The reasoning was well described on this Venture Beat article:

John Riccitiello, CEO of Unity, said in a presentation before the IPO that the company referred to the event as a UPO, where Unity’s own management team chose who got the initial allotment of the shares, rather than the investment bankers choosing the investors. The departure from the usual practice of an IPO was to be data driven and select the investors that Unity wanted to partner with and find people who wanted to hold on to the stock for the longer term.

“We wanted to select investors we were proud to partner with,” Riccitiello said.

As disclosed in their S1 filing documentation, Unity have lost money the last two years, while growing income. Now that they are publically trade, there will certainly be pressure from share holders for this to change and it will be interesting to see what impacts this has on the future of Unity.

Some of the concerns about the future of Unity should be assuaged by the approach they took to releasing shares. While this approach most likely resulted in a lower initial share price, it bodes well for the future of Unity and the managements teams’ belief in the company. At a $13.6B valuation, when compared to Epic Games recent private funding at a valuation of $17B, once you factor out the value of Fortnite and other games from Epic Games, it means both engines are valued roughly the same. You can learn more about the IPO in the video below.

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