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SouthPeak Secures $12.9M Funding For Expansion
by Eric Caoili
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June 20, 2008
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Publisher SouthPeak Interactive (Two Worlds) has secured $12.9 million in a private investment in public equity (PIPE) transaction, according to a report from VC news weblog VentureBeat.
The financing of its forthcoming mainstream PC and console titles runs contrary to the current trend of venture funding for mostly online games, casual games, virtual worlds, and social networking games.
Headquartered in Midlothian, Virginia, SouthPeak announced in January that it would be acquired by Global Services Partners to form SouthPeak Interactive Corporation, a new publicly held company, hoping to "access the public markets to accelerate its growth strategy and take advantage of strong industry growth trends."
The resulting transaction would have valued SouthPeak - whose games include Monster Madness: Grave Danger for PlayStation 3, Roogoo for Xbox Live Arcade, and the upcoming NinjaTown for Nintendo DS - at $30 million and given the studio access to Global Services' cash.
Global Services’ investors, however, refused to approve the deal, reportedly disagreeing with "the structure of the previous deal." Instead, in April, SouthPeak acquired Global Services, going public with SouthPeak Interactive and raising a round of venture money from Global Service's investors.
SouthPeak CEO Terry Phillips claims that the company is aiming for a gross profit of $4.5 million and revenue of $30 million for the fiscal year ending June 30th, according to VentureBeat. The studio intends to reduce its risk by outsourcing game development to independent developers in Australia, Canada, and Hungary.
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