Unity announces upcoming IPO – with services the key for future growth

Unity is going public. Yesterday in the US it filed a prospectus for investors with the SEC in the US. As of yet there are no details on when the IPO will occur, the price of shares or the total value of the float, but it will occur at some point in 2020. 

The prospectus itself runs to approaching 300 pages, detailing the company’s history, operations and financial details over many years. Most notably it details the huge growth but continued losses the company has made in recent years. 

The company grossed $299m in 2018, but that was up massively to $423m in 2019. However it lost $130m in 2018 and that also rose to $150m in 2019, as operating expenses grew to $573m from $429m. 

Losses for the first six months of were slightly down year on year from $60m to $52m, as operating expenses were outpaced by revenue, but such expenses were still up significantly year on year. 

The company is broadly divided into Create Solutions (that’s the Unity engine and licensing thereof) and Operate Solutions (services for Create clients such as servers, payment processing, audio chat), with the Operate Solutions making up more than half of revenues, $216m compared to $101m in the first six months of 2020. 

The financial details also note recent acquisitions, most of which are targeted to further grow that Operate Solutions segment.

In 2019 Unity paid $123.4m to buy Vivox, $48.8 million for Artomatix, and $53.1 million for DeltaDNA (all in a mix of cash and stocks). And in 2020 Unity paid $46.8 million for Finger Food Studios. Many of Unity’s key acquisitions, including Multiplay, have been to build the Operate side of its business in order to provide a broader service offering and better monetise its Create side clients.

“We at Unity are proud of our Create and Operate Solutions and how they solve the toughest engineering and data problems for our customers,” said CEO John Riticello. “These are leading and bleeding edge challenges. We see every day how our Create and Operate tools enable aspiring creators to not only be consumers of technology but creators of advanced technology products like games and cloud-based simulation systems that leverage our technologies. We love that we enable technology creators to get their start. Unity’s mission is to enable more people to be creators.”

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