Niantic, the company behind augmented reality (AR) hit Pokémon Go – which was to 2016 what Gangnam Style was to 2013 – could well be closing in on an IPO. In early November, the company announced it was partnering with Warner Bros to launch a Harry Potter game in 2018, entitled Harry Potter: Wizards Unite, which they hope will enchant users to the same extent as Pokémon Go.
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More positive news apparated a couple of weeks later when the company announced a $200m funding in a Series B round led by Spark Capital. Other investors in the round included Founders Fund, Meritech, Javelin Venture Partners, NetEase Inc and agency You & Mr. Jones. This latest funding round could be the spark for IPO rumours to circulate, especially given the recent push for a number of tech companies to go public.
Niantic was founded in 2010 as an internal startup in Google and spun out in 2015 while receiving funding from Google (Alphabet Inc), Nintendo and The Pokémon Company. It received a further $5m in Series A funding from angel investors, Alsop Louie Partners and You & Mr. Jones.
Representatives from the San Francisco-based company have stated that this additional funding would enable new strategic opportunities for the company. It is clear that the success of Pokémon Go, which has been downloaded more than 650 million times, has massively increased awareness of a company boasting offices in San Francisco, Seattle, Los Angeles and Tokyo, while being at the forefront of AR. The games use in-app purchases and regional partnerships – such as Starbucks in the case of Pokémon Go – to generate revenue, with the Harry Potter game likely to be monetised in a similar fashion. The new launch could be the alohomora needed to unlock more revenue for investors and be the final ingredient needed to send the company public.