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David Braben's Frontier goes public for £4M in cash

David Braben's Frontier goes public for £4M in cash

David Braben has taken his company Frontier Developments public for the first time, floating on the LSE's AIM exchange at a valuation of £39.4 million.

Frontier Developments, the game company founded by industry veteran David Braben, has announced an initial public offering on the London Stock Exchange's AIM market valuing the company at almost £40 million.

Frontier Developments was founded in 1994 by Braben following the success of his eight-bit open-world space sim Elite and its sequel Frontier: Elite II, both co-authored with Ian Bell. The latter proved a smash hit: offering billions of procedurally generated star systems to visit and an immersive simulation engine that allowed users to fly anywhere and do anything - watching the Earth rise from the surface of a nearby asteroid is one particular memory that stands out in this writer's mind - the open-ended titles struck a chord with gamers and would find its way onto the Amiga, CD32, Atari ST and PC platforms.

A sequel to the sequel, Frontier: First Encounters, was not quite as successful. Bell was not involved in the project, the result of which was a very public falling-out with his former colleague, and despite adding texture mapping to the engine to improve graphical fidelity, expanding the story-based gameplay and adding sampled video to the CD release, the game flopped due to a mass of bugs. Braben laid the blame for these firmly at the door of the publisher GameTek, which he claimed shipped the game early and in a near-unplayable state. With internet access still being a rarity in the homes of 1995, patching copies that had already been purchased wasn't exactly straightforward - and Braben would bring a lawsuit, settled by the publisher out-of-court in 1999, against GameTek.

Despite that little hiccough, Braben promised fans of the series that work on Elite 4 - despite F:FE not having the Elite name anywhere in its title - was well underway in 1998. Numerous teaser images were shared showing a far more up-to-date engine, but development slowed to a halt and news stopped coming.

Instead, Braben's company concentrated on its in-house Cobra software development kit and more casual titles including LostWinds, Kinectimals, and Roller Coaster Tycoon 3. Despite numerous requests for more information, Braben was silent on the future of the Elite franchise - until the crowd-funding site Kickstarter caught his eye.

Launching on the site back in 2012, the Kickstarter campaign for Elite: Dangerous, as Elite 4 became known, was an unalloyed success. Asking for an eyebrow-raising £1.25 million, a high figure for a development company which isn't exactly strapped for cash, Braben successfully raised nearly £1.6 million to develop the fourth entry in the franchise. Planned for PC and, following the reaching of a 'stretch goal', Mac, with claims of possible console, tablet and mobile ports, Elite: Dangerous is a massive project for the company - and one that looks set to burn through the cash raised at a voracious pace.

Accordingly, Frontier Developments has turned to other funding sources: in June, the company closed a round of private funding which raised £2.8 million to bring it to a total of £7.2 million in cash reserves, and agreed a revolving credit facility with Barclays Bank for an additional £3 million. Now, the company has announced that it is to float on the LSE's AIM exchange with £4 million in ordinary shares, valuing the company at a market capitalisation of £39.4 million.

'We are very excited to be listing our company at a time of such strong momentum in the business and the sector,' claimed Braben of the move. 'This placing of Frontier shares, combined with our recent oversubscribed funding round, is a strong endorsement both of the opportunities we have identified, and our team’s ability to deliver on the next round of enhancements to our business to make the most of those opportunities. It gives us the necessary financial impetus to continue operating at the forefront of the continually evolving and expanding global games market.'

Headquartered in Cambridge and with a satellite office in Nova Scotia, Canada, Frontier Developments has 227 full-time employees. While many of these will be working on Elite: Dangerous, the company has also been talking up the Cobra software development system as it looks to raise yet more funds by licensing the platform, which allows for easy porting of titles to PCs, consoles and mobile devices, to third party developers.

6 Comments

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Gareth Halfacree 10th July 2013, 10:46 Quote
Something I worked out after writing the article: Braben currently owns 69% of the company. Assuming the 10.15% (£4 million of a £39.4 million market cap) in public shares is coming out of everyone's allowance equally - which it may not, it's entirely up to the company who gets their shares converted - that will reduce to 62%. If Frontier Developments (Symbol: FDEV) reaches its £39.4 million target market cap, that'll mean Braben's personal share of the company is worth £24.43 million.

Nice.
maverik-sg1 10th July 2013, 11:09 Quote
I've engaged in the kickstarter for the new Elite game, however, for a company the employs 226 people, they've remained relatively low key yet appear to of accumulated a ton of money.

I'd say that this is a good move from someone wanting to get out of the business of running businesses and maybe this Elite release will see Mr Braben achieve all he wanted, exorcising the ghosts of the past before retiring a happy man?

I wish him well, he is already a legend and I sincerely hope the game is as good as (or better than) I hope.
ChromeX 11th July 2013, 11:14 Quote
I'd say it's about time he got his arse in gear and released something. He's had people backing him for ages without so much as even a hint of an alpha; he completely screwed up making the outsider, which nobody even wanted when he really should be been working on the new elite. Myself and a lot of fans of the elite games, who I know personally, are starting to get tired of Braben...
Jimbob 11th July 2013, 13:37 Quote
So he is worth millions but still relies on kickstarter? Hmm not confident of the new elite then braben?
Yaka 11th July 2013, 14:05 Quote
Wish to hell peeps stop throwing thier cash where it don't need to go
It's happening so often on kickstarter now they should stop it
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