NorthEdge sells stake in Cubic Motion
NorthEdge has sold its stake in automated animation company Cubic Motion to Epic Games.
The firm is understood to have generated an IRR of 50-60% on the investment. NorthEdge declined to comment on returns.
The sale marks the second exit for NorthEdge II. The fund, which closed on £300m in 2016, realised its investment in Bridge Farm Group in July 2019, following a two-year holding period. The deal generated a return of 2.3x gross and a 66% IRR for NorthEdge.
During the firm's holding period, Cubic Motion expanded in the US by developing a presence in Los Angeles. NorthEdge investment director George Potts said: "Three years ago, we were hugely impressed by Cubic Motion's demonstration at SigGraph Real-Time Live. We completed a growth capital investment shortly thereafter, and our partnership has enabled Cubic's research team to drive forward their unique 'analysis-by-synthesis' approach to computer vision.
"A big part of our growth capital was for people. We transformed the scale of the business and were able to hire a number of PhDs. We also built out the management team with several high-calibre hires. We invested in a local, IP-rich business and gave it the capital, the support and the network to grow and develop."
The acquirer is a video game and software development company based in the US. Following the acquisition, Cubic Motion will collaborate with 3Lateral, a developer of immersive technologies. 3Lateral was acquired by Epic Games in January 2019.
The firm did not use a corporate finance adviser for the transaction.
Previous funding
In September 2017, NorthEdge made a commitment for a growth capital investment of up to £20m for a minority stake, though Unquote understands the firm invested more than half of that sum.
Company
Headquartered in Manchester and founded in 2009, Cubic Motion is a provider of automated, performance-driven facial animation technology and services for video games, film, broadcast, and immersive experiences.
The company is EBITDA-positive and generates revenue of less than £10m.
People
NorthEdge Capital – George Potts (investment director).
Cubic Motion – Gareth Edwards (CEO).
Advisers
Vendor – Hill Dickinson, David Mkhitarian (legal).
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