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#GameTech #VRTech #MetaverseTech

ARCADIA is an established VR games and Metaverse producer in a 35%/y growing market. Focused on multiplayer user-generated content games and mechanics. New games are based on scientific consumer research. 3-5x total revenue/cost per game including marketing; fast 9-11 months lead time for new games; from 2 to 6 new VR games per year. The expected average EBITDA margin is 75%.

Headquarters: 
UK, London

Revenue: 
$0.5 m (2021), 266% CAGR (2021-2025)

Investment/Debt: 
$1.8 m/no debt

Last Round Valuation: 
$12 m (pre-Round A, 2021)

Team: 
Top management with more than 10 years of experience in VR game development

What does Arcadia do?

  • ARCADIA is an established VR games and Metaverse producer in a 35%/y growing market

  • Focused on multiplayer user-generated content games and mechanics. New games are based on scientific consumer research

Why attractive now?

  • Top-40 VR game studios in the world (by downloads as of 2020)

  • Scientific approach to determine mechanics and subject for new games

  • 2 VR games per year in 2022 growing to 4-6 by 2026

  • ARCADIA released Z-Wall (wave shooter), Hinge (a mystical complex horror), Jentrix (fruit Jenga)

  • 16k pre-orders for new game Requisition with the most expected new VR mechanics, release in April 2022

  • In 2020 Hinge was ranked 38/4612 in terms of sales among all paid games. Game Jentrix was rated 4.6/5.0 on Meta Quest

  • 1% VR and Metaverse markets (circa $1 tn) to be captured within next 10 years

  • 50+ highly qualified VR/gaming developers with past experience at such companies as Ubisoft, Game Inside, Nexters, Saber Interactive

  • Top management with more than 10 years of experience in VR game development

Why should the valuation grow?

  • 35% CAGR (2021-2025): VR is the fastest growing market in the entertainment & media (E&M) segment. According to Goldman Sachs, the VR Games market will frow from $22 bn (2021) to $72 bn (2025)

  • 2.2 m VR headsets were shipped worldwide in Q2 2021, +127% year-over-year. 29 m units VR headsets will be shipped worldwide in 2025 (CAGR of 91%, 2021-2025)

What are valuation growth drivers?

  • +4.0x Cooperation with top global VR platform (i.e., Oculus, Pico, HTC)

  • +2.5x Economies of scale

  • +2.0x Release of an AA-class VR game

  • +1.0x Games production for both VR & PC

What are key risks? | Ways to reduce them?

  • Overvaluation -0.0x | Ratchet clause application

  • Competition Pressure -0.5x| ARCADIA’s multiple comparative advantages

  • Exit Delay -2.0x | Protective deal structure 

  • Failed Games & Slow Development -2.0x | Scientific approach implementation to determine the best game to produce