French startup Voodoo has made a significant acquisition in the casual mobile gaming market. The company is acquiring Beach Bum, a game studio based in Israel and specialized in tabletop and card games.
It’s hard to get a clear number for this acquisition as Voodoo is offering both cash and shares and there are some retention bonuses. According to a source, Voodoo could be paying a few hundred million dollars in total. Beach Bum has generated $70 million in revenue over the past 12 months, so that gives you an idea of the size of the deal.
Voodoo is better known for its hyper-casual games, such as Helix Jump, Crowd City, Hole.io or Paper.io 2. The company is both a game developer and publisher. It partners with other game studios and has built a tech stack to optimize distribution, average revenue per user and more.
The company has raised money from Tencent and Goldman Sachs. More recently, Groupe Bruxelles Lambert invested €266 million ($309 million at today’s exchange rate) in Voodoo. It values the company at €1.7 billion (nearly $2 billion).
Voodoo didn’t waste any time and started looking at acquisition targets for external growth opportunities right after raising some fresh capital. Right now, there are 350 people working for Voodoo. Beach Bum has 150 employees who will join Voodoo.
With today’s acquisition, Voodoo is expanding to a new segment, adding a handful of casual games to its hyper-casual catalog. Beach Bum currently has three games in the App Store — Backgammon (Lord of the Board), Spades Royale and Gin Rummy Stars.
The business model is also a bit different. Historically, Voodoo has mostly relied on advertising to monetize its games. Beach Bum focuses on in-app purchases instead. This way, the acquisition diversifies Voodoo’s revenue sources.
“[Beach Bum] has two more games in development right now. The intention of Voodoo is to use Beach Bum as their entrance into in-app purchases. So I think they’ll want Beach Bum to put out as many games as possible,” Gigi Levy-Weiss told me.
Gigi Levy-Weiss is a general partner at VC firm NFX and co-founded Beach Bum back in 2015. He doesn’t currently have an operational role at the gaming company but he is active chairman of the board.
“The Israeli gaming industry has grown significantly in the recent few years. To date, it counts 400 different companies. Few exits have taken place, mainly by European and Asian buyers. A few months ago, an Israeli gaming company Playtika IPOed at Nasdaq for the valuation of $11B,” Avihai Michaeli, a senior investment banker based in Tel Aviv, told me.