Friday, November 13, 2015

CCP Gets A New Investor

Last night I worked pretty late and didn't feel well, but when I read the story in Variety about CCP receiving $30 million USD in funding to help develop virtual reality games, I knew I had to at least throw something together for today's post. To start with, here is CCP's press release about the story:


Funding from NEA and Novator Partners LLP Will Strengthen CCP’s Growing Slate of VR Initiatives

12 Nov 2015 – Reykjavik, Iceland – Privately held CCP Games, the leader in virtual reality immersive technology, today announced that it has raised $30 million to bolster the development of virtual reality (VR) content. New Enterprise Associates led the investment, with participation from private equity firm Novator Partners LLP.

The investment will be used to further position the company to drive innovation in VR as the technology begins to transform the entertainment industry.

Harry Weller, General Partner at NEA, has joined CCP’s Board of Directors and Andrew Schoen, also of NEA, will be joining as Deputy Director.

CCP has announced two VR games slated for release in the next eight months: EVE: Valkyrie will launch with the Oculus Rift in spring 2016 and PlayStation VR in the first half of 2016 and is being created at CCP’s Newcastle studio. Gunjack, in development at the company’s Shanghai studio, is scheduled for release on Samsung’s Gear VR platform later this month.
“We believe VR will revolutionize not just videogames, but the wider technology and media industry as a whole,” said Hilmar Veigar Pétursson, CEO of CCP.  “We were there at the beginning, and this investment will give us strength to maintain our leading development efforts.”

“We’ve been admirers of CCP for quite some time,” said Weller. “Their legacy with EVE Online and early investments in VR have put them in a leadership position, and we want to partner with them to further build on the great platform they have already established.”

CCP Games was founded in 1997 in Reykjavik, Iceland. With the launch of EVE Online in May 2003, CCP established itself as one of the most innovative companies in interactive entertainment, winning numerous awards and receiving critical acclaim worldwide. CCP’s major shareholders include Novator, General Catalyst, and NEA. 

More information about CCP Games can be found at //

More information about CCP Games’ products (including EVE:Valkyre and Gunjack) can be found at

More information about NEA can be found at

More information about Novator can be found at

About CCP

CCP is a leading independent game developer and has been praised for its artistry, game design and unique player-driven, infinitely scalable storytelling narratives. CCP is the creator of the critically acclaimed science-fiction game EVE Online (PC/Mac), DUST 514®, a groundbreaking, free-to-play, massively multiplayer online first-person shooter for the PlayStation®3, and Gunjack™, a virtual reality action game for the Samsung Gear VR mobile platform.  The company is currently developing EVE: Valkyrie™, a multiplayer virtual reality spaceship dogfighting shooter for PCs and the PlayStation®4. Founded and headquartered in Reykjavik, Iceland, in 1997, CCP is privately held, with additional offices in Atlanta, Newcastle, and Shanghai. For more information, visit

About New Enterprise Associates  
New Enterprise Associates, Inc. (NEA) is a global venture capital firm focused on helping entrepreneurs build transformational businesses across multiple stages, sectors and geographies. With nearly $17 billion in cumulative committed capital since inception, NEA invests in technology and healthcare companies at all stages in a company's lifecycle, from seed stage through IPO. The firm's long track record of successful investing includes more than 200 portfolio company IPOs and more than 320

About Novator Partners LLP

Novator Partners is a London-based investment company led by Thor Bjorgolfsson. Over the last 10 years Novator has completed a significant number of investments in sectors including telecommunications, pharmaceuticals, technology, financial services, clean energy, consumer products and real estate. The Novator team is highly experienced in a wide range of situations - from traditional private equity to special situations including transforming investments for successful exits, and in private and publicly listed companies.
I know, I know. Doing a copy/paste of an entire press release is a bad practice unless I have some additional facts that others aren't releasing. Like I mentioned at the top of the post, I don't feel too good so I'll just pull some stuff out of my notes. Hopefully some will find these items of value.

Over at MassivelyOP, Editor-In-Chief Bree Royce found the fact that two members of NEA will join the CCP Board of Directors significant, so I'll start with a quick look at the board.

To my knowledge, the last time the membership of the board of directors for CCP changed was on 11 April 2013. In response to a gender equity law passed in March 2010, CCP shuffled its board of directors. Removed were Sigurður Ólafsson and Vilhjálmur Þorsteinsson. Sigurður, CCP’s former marketing director, was made an alternate member of the board. Vilhjálmur is the Treasurer of the Social Democratic Alliance (first elected to the position in 2011). The Social Democratic Alliance lost half its seats in the 2013 parliamentary elections. Vilhjálmur was replaced as chairman of the board by Birgir Már Ragnarsson, a partner and General Counsel of Novator Partners LLP.

Added were Liv Bergþórsdóttir and Ragna Arnadottir. According to Bloomberg, Liv is Chairman of the Board of WOW Air and the CEO of the telecommunications company Nova. Nova is owned by Novator Partners LLP. Ragna Arnadottir is a former head of The Icelandic Ministry of Justice and Human Rights (2009-2010) and is currently the deputy CEO of Landsvirkjun, the national power company.

Also leaving the board was David P. Fialkow, but he was replaced by another member of General Catalyst Partners, Adam Valkin. General Catalyst Partners lists CCP as one of the investments that Valkin manages. Interestingly enough, Fialkow serves on the board of Verne Global with Birgir Már.

The last member of the board is Stephen “Steve” Wiecks, one of the founders of White Wolf Publishing. Considering the recent sale of White Wolf to Paradox as well as the gender equity law that companies with more than 50 employees have at least 40% of both genders represented on their boards, I presume that Wiecks is no longer on CCP's board of directors. Assuming that Wiecks is out, here is what I believe is the current make-up of CCP's board.

  • Birgir Már Ragnarsson (Chairman) - Partner and General Council, Novator Partners.
  • Ragna Arnadottir (Vice-Chairman) - CEO Landsvirkjun. What I call the government seat on the CCP board.
  • Adam Valkin - Managing Director, General Catalyst Partners.
  • Liv Bergþórsdóttir - CEO Nova, a Novator Partners company.
  • Harry Weller - General Partner, New Enterprise Associates.

As for Andrew Schoen of NEA becoming a deputy director, that's not really a seat on the board. In the past, I have seen those positions described as alternates and they do not appear to count as members of the board for purposes of the gender equity law. When Sigurður Ólafsson was removed from the board in 2013, he was made what was, at the time, described as an alternate director. For my list of alternate, or deputy, directors, I have:

Sorry MassivelyOP, but I think you got one of your facts wrong.

Speaking of investors, how much of a stake does up to $30 million USD get NEA in CCP? First, let's start with a look at the top 10 investors in CCP as of the end of 2013.

  1. NP ehf. - 29.8%
  2. Teno Investments S.Á.R.L. - 23.4%
  3. Sigurd Harðarson - 9.3% (founder of CCP)
  4. Hilmar Veigar Pétursson - 5.2% (CEO)
  5. Matthías Guðmundsson - 3.1%
  6. Meson Holding S.A. - 2.5%
  7. CCP Holding S.Á.R.L. - 2.2%
  8. Guðmundur Kristinsson - 2.1%
  9. Friðrik Örn Haraldsson - 2%
  10. A.C.S. safnreikningur I - 1.7%

I should note that Teno Investments S.Á.R.L. is owned by General Catalyst Partners. GCP is the company that purchased the $20 million USD in convertible bonds CCP issued in 2012. CCP withdrew the bonds from the Icelandic Nasdaq in April 2015. At the time I believed that CCP had somehow paid off the bonds two years early. Instead, did GCP remove the bonds in an effort to shop them to a big investor? Until the next financial statement comes out (and someone obtains it from the Icelandic government office), I will err on the side of caution and say no.

While we don't know the amount of shares purchased by NEA and Novator in the latest deal, we do know how many were offered in 2012. According to CCP's 2012 financial statement, the $20 million in bonds were convertible at $32/share, or for a total of 625,000 shares. As I noted back in May, 625,000 shares would place an investor behind only Novator, Teno Investments (i.e. GCP) and Sigurd Harðarson in terms of the number of shares held. Is it too much of a stretch to believe that NEA is now the third largest shareholder of CCP? Indeed, the wording in the press release seems to indicate this is true.

Like I stated above, I don't really feel that good, so I'll just throw out one last question that some financial wizard can answer. How much money will CCP's virtual reality effort require? The bond buyback and refinance effort in April presumably kicked paying back that $20 million down the road past 2017. CCP also received an undisclosed sum of money in the sale of White Wolf to Paradox. Now CCP raised another $30 million with a stock sale.

I know that CCP is doing good work in the field of virtual reality, as I've experienced almost all of CCP's work in progress at either Fanfest or EVE Vegas. I'm not saying they have impressive work in the pipeline, but the demo of EVE: Gunjack I played at Fanfest was the least impressive bit of software I saw. I really hope the effort pays off. I guess I should feel better knowing that a company like NEA feels money is about to rain down on CCP headquarters in Reykjavik.

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