The two founders of Cashcade, an online gambling marketing company which owns a raft of bingo websites, have secured a £15 million investment to launch a venture capital fund that will back digital monetised gaming start-ups.
The two founders of Cashcade, an online gambling marketing company which owns a raft of bingo websites, have secured an initial £15 million investment to launch a venture capital fund that will back digital monetised gaming start-ups.
Simon Collins and Patrick Southon, who founded Cashcade in London in 2001, launched New Game Capital this month with the support of their former employers Bwin.Party Digital Entertainment. Bwin.Party, which acquired Cashcade for £96 million in July 2009, has invested £15 million in the firm, while the fund’s investment team injected £1 million.
The two drew wide accolades for their success in growing Cashcade. In the year leading up to the acquistion, the company generated net revenue of £44.9 million, nearly double the year before, and EBITDA of £12.2 million.
New Game aims to raise £50 million to invest in up to 15 small early-stage companies that look to exploit digital games with paid-participation. According to a statement, the firm will target companies that have consumer-facing, intellectual property or B2B business models.
Already, the online gambling fund has executed a maiden transaction, investing in a first fundraising round for free-to-play social bingo provider Avatingo. The business is a Facebook bingo application, which New Game describes as a ‘multi-platform virtual world with a personalised social bingo experience’. The company plans to improve the game’s concept, product and implementation with the funding.
In July 2009, PartyGaming acquired the entire issued share capital of Cashcade, owner of the gaming websites Foxy Bingo, Think Bingo, and Bingo Scotland, for an initial payment of £71.9 million with up to a further £24 million based on profit performance. Collins and Southon left Bwin.Party, the FTSE250-company created in March this year following the merger of Bwin and PartyGaming, in April this year to start work on the new fund
Commenting about the direction of the fund, Southon says, ‘Casual games have brought digital gaming into the mainstream of the global entertainment industry and have attracted millions of new users to gaming over the past five years.’