Sugar, a financing platform created to provide capital to games and app studios with exciting growth ambitions, recently secured £1.5 million pre-seed funding.
The round was led by Passion Capital and included participation from Velo Partners as well as strategic angel investors, including Victoria van Lennep of Lendable. The London-based lending platform will use the funding to scale the platform to support even more studios in the key markets.
Malin Posern, Partner at Passion Capital, said, “We’re thrilled to be partnering with Sugar and working with the team. Flexible, quick, and efficient financing for game studios and app developers makes a lot of sense. There’s an opportunity here to make these ecosystems thrive, and Sugar will provide the platform to help drive that innovation along with the ambition to become a world-leading financing provider”.
Helps game and app studios to scale-up,
Founded in 2019, the company provides quick, fully automated, data-driven finance to help game and app studios scale-up, without them having to raise equity finance.
Matt Frenchman, Sugar CEO, said, “We’re so excited to be working with Passion and delighted to have expert fintech investors on board. Like us, Passion sees access to finance as a big problem in the games and apps world. With this round of funding, we can focus on developing our platform, growing the team, and ultimately giving studios quick and easy finance to scale up”.
Sugar’s products
The company offers three products:
- SugarBoost – A data-driven marketing loan to scale up a studio’s revenues.
- SugarFlow – Gives studios early access to their digital revenues.
- SugarCap – Advances the studios their VGTR credits (video games tax relief, an HMRC rebate similar to R&D credits), which normally takes months to process.
Revenue model
Based on live data analysis, Sugar provides finance to a studio, which is then repaid over time by the revenues of the game or app in question. Depending on the metrics of the game or app, Sugar’s financing levels can be increased as required.
Evan Hoff, partner at Velo Capital Partners commented: “We see Sugar fulfilling a crucial role in the European games funding ecosystem, and believe Matt and the team are building leading-edge algorithms and processes which will support game developers to scale their businesses in the ultimate win-win proposition.”
Expansion plans
Notably, the company has provided finance to several UK studios in 2020 and plans to build its platform and business in the UK, before expanding to Scandinavia and the US in the coming years.