Keywords Studios creates VC fund and invests £300,000 in AppSecTest

5 Jul 2018

Pinball wizard. Image: Weigelstein/Shutterstock

Acquisitive Irish games empire is branching into tech funding.

Dublin-headquartered games company Keywords Studios has established its own venture capital fund, Keywords Ventures (KWV).

KWV has revealed its first investment of up to £300,000 in a Series A round in AppSecTest, a GDPR cloud company that tests mobile apps for GDPR compliance.

‘KWV will be making selective and relatively small investments in companies where we can help commercialise complementary products or services’

The bold move is the latest in a series of ambitious steps by the company that have included it recently acquiring Hollywood games production company Blindlight for $10m and London’s Fire Without Smoke for £5.2m.

In 2017 alone, Keywords made 11 acquisitions worldwide, including VMC last October for $66.4m to give it leadership in functional testing, and Sperasoft in December for $27m.

Headed by CEO Andrew Day, Keywords Studios was established in Dublin in 1998 by Giorgio Guastalla and Teresa Luppino. It works on video game development for multibillion-dollar gaming giants such as Electronic Arts, Activision Blizzard, Warner Bros, Riot Games, Sony, Supercell, Take-Two, Ubisoft and Nintendo.

The AIM stock exchange-listed company has more than 42 facilities in 20 countries worldwide.

Venture forth and conquer the video game services world

KWV plans to make modest investments in innovative technologies and services that will benefit Keywords Studios’ clients while also accelerating the growth of the start-ups it is investing in.

An investment committee formed of senior members of the Keywords executive team, many of whom have started and run their own businesses and have technical backgrounds, will propose investments and commercial arrangements to the board of Keywords, which will agree funding on a case-by-case basis before taking what will typically be minority stakes in selected investee companies.

The first investee, AppSecTest, is the creator of AS Analyser, a cloud-based automatic testing solution for mobile apps, including games. The investment of up to £300,000 in AppSecTest will give Keywords Studios a shareholding of 45pc in the pre-revenue company.

AS Analyser very effectively analyses apps for compliance with the EU’s GDPR, producing a detailed report of those aspects of the app that are likely to contravene the regulations.

Alongside the funding being provided, Keywords has entered into an exclusive worldwide licence to commercialise AS Analyser. It will begin client trials of AS Analyser during July with a possible full deployment of the solution in September.

“We are excited by the establishment of KWV, which we believe will help bring products, technology and services to market that will be attractive to our clients,” Day explained.

“Our established relationships with most of the world’s leading games companies, and our expanded global presence, provide a strong platform to support investees’ growth while adding further value to the relationships we enjoy with our clients.”

Day said that Keywords’ strategy to consolidate the fragmented market for video game services remains unchanged and, if anything, KWV will complement this mission.

“KWV will be making selective and relatively small investments in companies where we can help commercialise complementary products or services, with our annual investment in KWV unlikely to exceed 5pc of our annual spend on acquisitions,” Day said.

The plan is to move AS Analyser to full commercialisation by improving the existing Android version of the platform, and also develop an iOS version.

“Our investment in AppSec Test Ltd is intended to help bring AS Analyser to market through our extensive geographic reach across the video games industry and beyond. We believe AppSec Test fits the investment model of KWV particularly well,” Day concluded.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years