February 4, 2023


Skillful Business Crafters

Turkish mobile gaming startup Dream Games raises $255 million

Royal Match, a puzzle game developed by Turkey’s Dream Games, is now played by 13 million people each month.

Dream Games

Investors are betting the next big success story in gaming will come out of Turkey, even as the country endures a brutal economic crisis.

Istanbul-based mobile game developer Dream Games has raised $255 million in a new round of funding, the company told CNBC. Investors now value the firm at $2.75 billion, almost triple the $1 billion it was worth just six months ago in its last series of fundraising.

The cash 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 tech more broadly — is proving to be a bright spot in an otherwise hellish economic landscape in Turkey.

Turks have faced soaring prices amid a plunge in the value of the lira — the currency has fallen more than 40{614c55998ee2f2593d42882a86444f5648ce8ae9e914fe55020881091372b47b} against the U.S. dollar in the past year.

Some of this decline was fueled by geopolitical tensions, in addition to Turkey’s excessive trade deficit and mounting debts. But investors say the situation was exacerbated by an unorthodox monetary policy, with the central bank cutting interest rates aggressively at the behest of President Recep Tayyip Erdogan.

Turkish tech goes global

Dream Games was founded in 2019 by former executives at Peak Games, another mobile gaming start-up which was acquired by Zynga for $1.8 billion. Zynga later agreed to be taken over by Take-Two Interactive in a $12.7 billion deal.

Turkey is now home to some of the most valuable tech start-ups in the world, with e-commerce firm Trendyol valued at $16.5 billion and online grocery start-up Getir worth $7.7 billion.

Soner Aydemir, Dream Games’ co-founder and CEO, has built a business even more valuable than his previous venture. He says the success of Peak Games and other Turkish companies has helped drive investor interest in the country’s burgeoning tech industry.

“In Turkey, we have thousands of talented young people,” Aydemir told CNBC in an interview. “Mobile gaming gives them the opportunity to reach a global audience for the first time.”

In a similar vein, Getir has been expanding its reach beyond Turkey into other markets such as the U.K. and America.

Aydemir said Dream Games is less affected by volatility in the local currency as “99{614c55998ee2f2593d42882a86444f5648ce8ae9e914fe55020881091372b47b} of our revenue comes from outside Turkey.” The company also looks after its employees, he added, offering “competitive” salaries compared to other firms.

“There’s at least one digital company in Turkey which is worth more than $10 billion, so it’s obviously been a source of great talent for a long time,” Stephane Kurgan, the partner at Index Ventures who led the investment in Dream Games, told CNBC.

Inspired by Pixar

Dream Games released its first title, a puzzle game called Royal Match, in March last year.

The game sees players match up tiles of varying colors until they get enough points to progress to the next level, similar to Activision-owned King’s Candy Crush Saga and Peak Games’ Toon Blast, which Aydemir had worked on before leaving the firm.

Royal Match recently broke into the top five highest-grossing mobile games on Apple’s App Store in the U.S., according to data from App Annie. It’s now played by 13 million people each month and generates around $31 million in monthly net revenues after Apple and Google take their cut of in-app transactions.

Looking ahead, Dream Games plans to continue developing Royal Match and begin work on a new title later this year.

“We should expand our audience,” Aydemir said. “To do that we should create multiple titles.”

The Dream Games founder says he takes a lot of inspiration from Disney’s Pixar animation studio. “We are not like a typical gaming company focusing on the gaming audience,” he said. “We are targeting almost everyone in the world.”

“Virality and monetization” are key to building a mobile gaming company, Index Ventures’ Kurgan told CNBC. Kurgan was previously chief operating officer at King.

Take-Two Interactive’s almost $13 billion purchase of Zynga “highlights the growth of mobile gaming,” he added. Mobile is the fastest-growing segment of the $180 billion video game industry, accounting for more than 50{614c55998ee2f2593d42882a86444f5648ce8ae9e914fe55020881091372b47b} of the entire market.

It’s not the first time Index has made a big bet on gaming. The firm has also invested in the likes of Roblox, King and Supercell, which is now owned by Chinese tech giant Tencent.