Fortnite maker Epic Games today announced a $1.78 billion funding round at a $17.3 billion valuation. The company said the funding included new capital such as Sony’s previously announced $250 million investment as well as secondary purchases from employee equity holders.

Epic Games is the developer and publisher of Fortnite, which has more than 350 million registered players (this doesn’t mean they’re all active). And it’s also the creator of the Unreal Engine, a fundamental toolset for building many games (and increasingly, making movies and TV).

Additional investors include Baillie Gifford, funds and accounts that Black Rock manages, Fidelity Management & Research Company, Lightspeed Venture Partners, Ontario Teachers’ Pension Plan Board, funds and accounts that T. Rowe Price Associates controls, and David Tepper.

Existing investors KKR and Smash Ventures added to their 2018 investment. It’s not clear how much is additional funding for the company itself and how much of the money went to shareholders (which Epic identified as employees) selling their shares in secondary deals to new shareholders. One Epic shareholder, Endeavor (the Hollywood agency and owner of UFC) was reported as selling its stake. Epic Games did not comment on that.

In July, Epic said that Sony bought a 1.4% stake at a $17 billion post-money valuation. Epic said today that CEO Tim Sweeney remains in control of the company and that it has only a single class of common stock.

Tim Sweeney, CEO of Epic Games, argued to make the game industry more open in the next decade at the Dice Summit 2020.

Above: Epic Games CEO Tim Sweeney argued to make the game industry more open in the next decade at the Dice Summit 2020.

Image Credit: Dean Takahashi

In a statement, Sweeney said, “Having the support of leaders in the financial community accelerates Epic’s efforts to build a new kind of digital ecosystem using real-time 3D technology, services that connect hundreds of millions of people, and a digital storefront that offers a fair business model. We are delighted to have them as part of the Epic family.”

Credit Suisse and The Raine Group acted as joint placement agents to Epic, and Wilson Sonsini Goodrich & Rosati provided legal counsel to Epic.

Privately held Epic does not disclose revenues or profits. But as it raised money, we learned from sources that Epic has had a strong financial record thanks to Fortnite.

In 2019, Epic Games reported $4.2 billion in revenue and $730 million in earnings before interest, taxes, depreciation, and amortization (EBITDA, a key measure of profitability). Revenue for 2020 is forecast to be $5 billion, with EBITDA of $1 billion.

In April alone, thanks to the pandemic, Fortnite revenue was $400 million, sources told me. Epic has said that in April, players spent 3.2 billion hours in the battle royale shooter. Fortnite also garnered a huge amount of attention for staging a virtual Travis Scott concert that drew more than 27 million people.

In 2018, Epic Games did better than it did in 2019. Revenue in 2018 was $5.6 billion. Epic used a lot of that money to invest in its Epic Games Store, expanding its staff for Fortnite and Unreal Engine, and some acquisitions.