The archive · Developer & Business Tools · Financial decision · 2004–2016
Unity raises $181M at ~$1.5B to fund its bet that AR/VR gets built on its engine
Game-engine maker Unity raised a $181M Series C led by DFJ Growth to fund its bet that AR/VR content gets built on its write-once engine.
Unity Technologies
What the business is
Unity makes a cross-platform game engine plus advertising and analytics services, letting studios from indie to triple-A build one experience and ship it across mobile, desktop, console and VR/AR hardware.
Starting capital：$181M Series C led by DFJ Growth, joined by China Investment Corporation, FreeS Fund, Thrive Capital and Max Levchin plus existing investors Sequoia Capital and WestSummit Capital, at a ~$1.5B valuation reported by two New York Times sources; Unity's total prior capital was only $25.5M.
How it started
Unity was 12 years old in 2016, and for years it was the underdog of game engines. The shift came in 2008, when Unity fully embraced mobile and became one of the first platforms to support the iPhone during the earliest days of the App Store; from there it kept riding platform waves and added monetization tools, growing into the engine of choice for games and much of the entertainment industry.
What happened
By July 2016 Unity was the de facto engine: 5.5M registered developers versus Unreal's 2M, roughly 90% of Gear VR content built on Unity by the company's estimate, and Pokemon Go built on the engine. Unity had raised just $25.5M in its history (Microsoft reportedly considered buying it for $1-2B in late 2014, which never happened), so on 2016-07-13 it closed a $181M Series C led by DFJ Growth with China Investment Corporation, FreeS Fund, Thrive Capital and Max Levchin joining Sequoia and WestSummit, at a valuation of about $1.5B per two sources quoted by The New York Times. DFJ Growth partner Barry Schuler took a board seat, arguing the write-once, publish-many engine lets studios support all AR/VR hardware without choosing a winner.
No ending yet — it is still running.
Background
Unity Technologies, founded about 12 years before this report, makes the Unity game engine plus advertising and analytics services that let any studio from indie to triple-A build one experience and publish it across mobile, desktop, console and VR/AR hardware. By 2016 it had become the engine of choice for games and much of the entertainment industry, and it was betting that the same write-once, publish-many model would make it the engine the AR/VR future is built on.
The proof points were already there: 5.5M registered developers against Unreal Engine's 2M, about 90% of Gear VR content built on Unity by the company's estimate, and Pokemon Go, the summer's smash hit, built on Unity. Against that momentum Unity's prior capital was tiny — just $25.5M — so on 2016-07-13 it closed a $181M Series C led by DFJ Growth, with China Investment Corporation, FreeS Fund, Thrive Capital and Max Levchin joining Sequoia and WestSummit, at a valuation of about $1.5B according to two sources quoted by The New York Times. DFJ Growth partner Barry Schuler joined the board.
The strategic logic was platform agnosticism: with write-once, publish-many, studios never had to pick an AR or VR hardware winner, so every new headset was another market Unity already served. The round dwarfed the company's previous $25.5M raised and followed 2014 rumors, which never materialized, that Microsoft might buy Unity for $1-2B.
What has to be true
- Unity's 2008 iPhone bet made it the default mobile engine, so the mobile boom compounded its developer base instead of creating a rival.
- Platform agnosticism repeated the trick: with write-once, publish-many, no studio had to choose an AR/VR winner, so every headset became a Unity customer.
- The numbers gave the thesis scale: 5.5M registered developers versus Unreal's 2M, ~90% of Gear VR content, and Pokemon Go as proof the engine could carry a cultural hit.
- The AR/VR moment demanded cash: after only $25.5M raised in 12 years, Unity took $181M at ~$1.5B to accelerate the platform rather than cede the next wave to Epic or a newcomer.
What can be applied
Unity compounded one bet, write once and publish many, across every platform shift from iPhone to AR/VR, so each new wave grew its developer base instead of resetting it.
Aftermath
As of 2016-07-13 Unity had just closed its $181M Series C at a reported valuation of about $1.5B, with DFJ Growth partner Barry Schuler joining the board. The company reported 5.5M registered developers, about 90% of Gear VR content built on Unity, and Pokemon Go as its marquee AR proof point; DFJ framed the round as positioning Unity to accelerate AR/VR on top of its write-once, publish-many engine.
Sources
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