Royal Match, a puzzle game developed by the Turkish company Dream Games, is now played by 13 million people every month.
Investors are betting that the next big gaming success story will come from Turkey, even as the country grapples with a devastating economic crisis.
Istanbul-based mobile game developer Dream Games has raised $255 million in a new funding round, the company told CNBC. Investors now value the company at $2.75 billion, nearly three times the $1 billion it was worth just six months ago at the last fundraising series.
The liquidity injection was led by Index Ventures, which first backed the company in February 2021. Existing investors, Makers Fund, IVP, Kora and Balderton Capital also participated in the round, while BlackRock joined as a new investor.
Mobile gaming – and technology more broadly – has proven to be a bright spot in Turkey’s hellish economic landscape.
Turks have faced a sharp rise in prices amid a depreciation of the lira – the currency has fallen more than 40% against the US dollar in the past year.
Some of this decline has been driven by geopolitical tensions, as well as Turkey’s excessive trade deficit and mounting debt. But investors say the situation has been exacerbated by an unconventional monetary policy, with the central bank aggressively cutting interest rates at the behest of President Recep Tayyip Erdogan.
Turkish technology goes global
Dream Games was founded in 2019 by former executives at Peak Games, another mobile gaming startup that Zynga acquired for $1.8 billion. Zynga later agreed to be acquired by Take-Two Interactive in a $12.7 billion deal.
Turkey is now home to some of the world’s most valuable technology startups, with e-commerce company Trendyol valued at $16.5 billion and online grocery startup Getir at $7.7 billion.
Soner Aydemir, co-founder and CEO of Dream Games, has built a more valuable business than his previous venture. He says the success of Peak Games and other Turkish companies has helped boost investor interest in the country’s booming tech industry.
“We have thousands of talented young people in Turkey,” Aydemir told CNBC in an interview. “Mobile games give them the opportunity to reach a global audience for the first time.”
In a similar vein, Getir is expanding its reach outside Turkey to other markets such as the UK and America.
Aydemir said Dream Games is less affected by the volatility in the local currency because “99% of our revenue comes from outside Turkey.” He added that the company also takes care of its employees and offers “competitive” salaries compared to other companies.
“There is at least one digital company in Turkey that is worth more than $10 billion, so it’s clear that they’ve been a source of great talent for a long time,” Stefan Kurgan, a partner at Index Ventures who led the investment in Dream Games, told CNBC. .
Inspired by Pixar
Dream Games released their first title, a puzzle game called Royal Match, in March of last year.
The game sees players match tiles of different colors until they get enough points to advance to the next level, similar to Activision’s King’s Candy Crush Saga and Peak Games’ Toon Blast, which Aydemir worked on before leaving the company.
Royal Match recently broke into the top five highest-grossing mobile games on the Apple App Store in the US, according to data from App Annie. It is now operated by 13 million people each month and generates a net monthly revenue of about $31 million after Apple and Google got their share of in-app transactions.
Looking to the future, Dream Games plans to continue developing the Royal Match and begin work on a new title later this year.
“We have to expand our audience,” Aydemir said. “To do this you must create multiple addresses.”
The Dream Games founder says he takes a lot of inspiration from Disney’s animation studio Pixar. “We are not like a typical gaming company focused on the gaming audience,” he said. “We target almost everyone in the world.”
Corgan of Index Ventures told CNBC that “masculinity and monetization” are key to building a mobile gaming company. Corgan was previously King’s chief operating officer.
He added that Take-Two Interactive’s $13 billion purchase of Zynga “highlights the growth of mobile gaming.” Mobile is the fastest growing segment of the $180 billion video game industry, which accounts for more than 50% of the entire market.
This isn’t the first time Index has bet heavily on gaming. The company has also invested in companies such as Roblox, King and Supercell, now owned by Chinese tech giant Tencent.