Game developer Neptune’s shares soared 20 percent in morning trading on Aug. 14 following the news that it has received funding worth 10 billion won ($8.24 million) from Krafton Game Union, formerly known as Bluehole.
The South Korean company said in a regulatory filing that Krafton has decided to purchase 1.47 million newly issued shares at 6,780 won apiece, and will hold a 6.3 percent stake.
The increased capital will be used for expansion of its esports business along with other management purposes, the company said.
The esports market is forecast to reach $1.5 billion next year and is expected to become a $3 billion market by 2020, according to a report by Goldman Sachs in October last year. Around 167 million people are estimated to have watched esports in 2018, which is predicted to grow to 276 million by 2020.
‘The capital increase was decided as the two companies share the same view on Neptune’s excellent selection of game developers and esports business,” the company said.
As part of its esports push, Neptune last year invested 14.5 billion won in Still8, a Korean esports agency and 12.1 billion won in YouTuber management startup Sandbox Network, which operates an esports team called Sandbox Gaming.
Neptune, founded in 2012, invested 5 billion won, or 30,000 won per share, in Bluehole Studio in 2017, providing much-needed funding to the maker of The Player Unknown’s Battleground. Backed by the huge success of the game, the value of over-the-counter stocks of Bluehole jumped to more than 500,000 won.
Shares in Neptune closed up 6.09 percent to 7,320 won on Aug. 14 while benchmark Kosdaq, Korea's tech-heavy boaord, rose 1.08 percent.
By Park Ga-young (email@example.com)