Tencent just added another portfolio member to its expanding global gaming empire to up its game in mobile casual plays.
Voodoo, the French company that has amassed 300 million monthly active users from its suite of mobile games, announced Monday that Tencent has become a minority shareholder in its business valued at $1.4 billion.
The company did not disclose the funding amount, but Tencent has made offerings of all sizes, from big checks that bought it full control in studios like Riot Games to smaller deals in return for minority stakes in the likes of Epic Games.
Bloomberg reported in May that the French games company began to look for a potential stakeholder in a deal that could value the company at more than $1.6 billion. Goldman Sachs became Voodoo’s minority shareholder in 2018, and sources from Reuters put the funding amount at about $200 million.
The seven-year-old startup was co-founded by its current CEO Alexandre Yazdi and Laurent Ritter. Yazdi will remain the largest shareholder and together with the management will retain control of the group, according to the company.
Voodoo has emerged as one of the world’s biggest publishers of “hyper-casual games,” titles that are built quickly, serve a single purpose and don’t obsess over the “glitz and glam” of design, as we wrote before.
Gateway to APAC
For Voodoo, the Tencent deal is clearly a gateway into the massive Asia Pacific gaming market. The partnership can further extend its two-pronged business of distributing its own games and third-party titles to the region, Yazdi told TechNewHero over a phone call.
“We can improve the way we distribute on Android [in the region] and also use local influencers to create virality on our games,” he added. “APAC is 50% of the overall gaming industry, so we really think there is a huge opportunity to grow.”
China is already a key market for Voodoo, which generated €360 million ($428 million) in revenue last year. The company has racked up a total of 3.7 billion downloads on iOS and Android so far, with 25% of its installs coming from APAC. China contributes 7.5% of downloads, all of which are currently on iOS, and the Tencent tie-up can certainly give Voodoo insight into the esoteric publishing world of China’s third-party Android stores.
For Tencent, Voodoo’s reservoir of mini games is an ideal match to WeChat messenger, which itself runs a platform for light and simple games that can reach over 1 billion users.
The other benefit of teaming up with Voodoo, as games analyst Daniel Ahmad pointed out, is that its ad-driven model means it has fewer regulatory hoops to jump in China compared to publishers monetizing through in-app purchases, which require a government license.
Voodoo operates through a team of 250 staff, with two-thirds in France and the rest spread across the U.K., Turkey, Japan, Singapore and other countries, with plans to open a China office down the road.