Investors are betting on the growth of video games as an advertising channel.
On Tuesday, in-game ad company Anzu announced a $48 million Series B round, bringing its total funding to $65 million.
The new round clocks in at more than triple the $15.5 million Anzu has raised since 2019.
The company’s immediate plans for reinvesting its new capital include hiring more executive leadership to spearhead sales and partnerships, growing its engineering team and expanding its presence in the US and Japan, said CEO Itamar Benedy.
Skin in the game
The Series B was led by Emmis Corporation, a media holding company founded by former Seattle Mariners owner Jeff Smulyan.
Other new investors in the round include PayPal Ventures, Bandai Namco Entertainment 021 Fund and private equity firms Evolution VC Partners and Simon Equity Partners.
Anzu has been careful only to work with investors that will allow the company to maintain its independence, Benedy said.
None of the investors have board seats or an outsized influence over the company’s decision-making, he said, and the fact that Anzu is well capitalized means it’s not looking to get acquired anytime soon.
But Anzu’s investor roster does hint at the company’s ambitions, Benedy said.
Take Bandai Namco, which is one of the most prominent video game publishers in the world. Its list of IP reads like a timeline of video game history, from 1980s arcade OG Pac-Man to last year’s Elden Ring, which has sold at least 20.5 million copies to date.
And then there’s PayPal, one of the biggest names in online payment processing.
“The next Shopify is going to be inside the game,” Benedy said. “Around commerce, gaming and advertising, there’s exciting stuff happening, and PayPal is in those worlds.”
In addition to its new investors, all but one of the participants from Anzu’s Series A returned for the B round, including Sony Innovation Fund, NBCUniversal, WPP, Bitkraft, Samsung Next, Harris Blitzer Sports & Entertainment Ventures, Axel Springer and Marquee Ventures. (Benedy declined to specify which Series A investor was the holdout in this round.)
Further contributions were made by Anzu’s angel investors, a list that includes progressive VC fund Gaingels and Mark Merrill, co-founder of Riot Games.
With this Series B, Anzu’s early investors had the opportunity to exit with a 10x valuation increase. Anzu declined to share the company’s current valuation.
As part of the Series B, Anzu is also converting SAFE notes granted to some early investors, which the company declined to name. SAFE notes are an investment mechanism that allows early investors to buy equity in a company at a discount.
Hiring plans
With the infusion of cash, Anzu is planning a hiring spree to bolster sales, partnerships and engineering.
On the partnership front, Anzu will expand its existing relationships with The Trade Desk, Integral Ad Science, WPP, NBCU, HTC and Samsung, as well as with indie developers and AAA video game publishers, such as Sony and Ubisoft.
The company’s headcount is around 100 today, and roughly half are engineers. Anzu has plans to fill 30 new roles in the short term, Benedy said.
Recent hires include Nerissa MacDonald, the former head of Meta’s North American partner solutions team, as EVP of global sales, as well as research and insights leads and the company’s first-ever creative director.
Although Anzu will hire sales and support staff in the US and Japan, it plans to keep its R&D team primarily based in Israel, where the company has its headquarters.
The product road map will focus on improving targeting, measurement and attribution for programmatic in-game ads and on streamlining the integration process for game developers.
“The winner of this category is going to be the company that has the best gaming partners, the best technology and the best [advertising] partnerships,” Benedy said. “This funding helps us with all three.”
