Eight Roads exits InnoGames

The acquirer, Swedish media group MTG, bought a 35% stake in the business, with an option to increase its stake to 51%. The 35% stake is being acquired in two tranches: 21% in Q4 2016 and 14% in Q1 2017. InnoGames' EV of €260m is equivalent to 10.4x its projected EBITDA.

InnoGames said in a statement it generated annual revenue growth of 20% over the last three years, with expected revenues of €125m in 2016 and EBITDA of 20%.

Eight Roads said that, during its investment period, InnoGames established an advisory board and started developing games for mobile devices.

Previous funding
Eight Roads, then known as Fidelity Growth Partners Europe, invested in InnoGames in May 2010 in a deal worth €10m. It was Eight Roads' first investment from its £100m fund, which was raised after Fidelity Ventures split into Fidelity Growth Partners Europe and Volition Capital.

Company
Founded in 2007 and based in Hamburg, InnoGames is an online games developer and publisher. It runs a free-to-play model with revenues coming from in-game purchasing.

The company runs four studios, three in Hamburg and one in Dusseldorf, and employs 400 people. It claims to have 150 million registered players.
The US is InnoGames' largest market in terms of revenue (25%), followed by Germany (15%) and France (10%).

People
Eight Roads Ventures – Davor Hebel (head of Europe ventures).  
MTG – Jørgen Madsen Lindemann (CEO).
InnoGames – Hendrik Klindworth (CEO).

Adviser
Seller – GP Bullhound (corporate finance).

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