Iconic games console brand Atari is set to take a $2 million stake in struggling video game developer Tinybuild, as part of a $14 million funding deal that should keep the studio afloat.
The funding is much-needed after Tinybuild revealed a combination of court settlements and poor sales from a business it had acquired meant that it could run out of cash by the end of January.
Today, it said French firm Atari SA will take a stake in the business in the 5p-per-share offer. Tinybuild’s CEO Alex Nichiporchik is also injecting $10 million as part of the deal, while another $2.2 million of shares will be made available in an open offer. Depending on the results of the open offer, the deal could give Nichiporchik more than 50% of TinyBuild’s shares and voting rights. Given the increase in his voting rights, the deal must be approved by shareholder vote.
Atari SA, originally known as Infogrames, bought the remaining gaming business of classic console maker Atari in 2001, and changed its name in 2003.
TinyBuild says around $3.5 million of the funding raised will be used to pay its legal settlements with the founders of Versus Evil, a business the developer acquired in 2021. At least $5 million will be used to invest in software development and at least $3 million will go towards working capital.
Shares jumped by 60% to 4p, valuing the business at £7.4 million. However, that’s still down by more than 96% from where they started the year and 98% from their 2021 IPO price. At their peak, the shares traded at 293p and the studio, known for games including Hello Neighbor and No Time to Explain, was worth around £600 million.
