Irish app developer StoryToys has been acquired by British indie games developer Team17 in a deal worth an initial $26.5 million (€22.3 million) as the company bets on continued strong demand for educational apps.
Under the deal, the UK company will buy the business and assets of StoryToys via the acquisition of its parent company, TouchPress, giving the company a greater foothold in the edutainment market and broadening its existing skillset.
Dublin-based StoryToys is an award-winning developer of interactive books and games for children, working with several leading children's brands such as Lego, Disney, Pixar, Warner Bros and Penguin. Founded in 2011, the company teamed up with Amplify Games in 2016 to integrate the portfolios of StoryToys, Amplify Games and TouchPress under the Touch Press brand.
It generates revenues from its apps through subscription, in-app purchases and paid apps. According to StoryToys, its apps are available in up to 28 different languages and have been downloaded more than 100 million times across 120 countries.
Team17 said it would pay an initial $26.5 million for the company, with a further $22.5 million payable in cash if certain targets were met.
Latest accounts for Touch Press (Ireland) Ltd, lodged with the companies offices in Dublin, show that it had accumulated losses of €10.2 million at the end of 2019. The company made a loss in 2019 of €1.2 million and its auditors Grant Thornton highlighted that it had net losses of €7.4 million and a “material uncertainty” existed about its ability to continue as a going concern.
In a note to the accounts, the company said it had secured assurances from its parent group, Touch Press Inc in the United States, around funding for a period of at least 12 months, which along with forecasts on performance gave it a “reasonable expectation” that it would have sufficient resources to continue in “operational existence for the “foreseeable future”.
StoryToys chief executive Emmet O’Neill will remain in his role with the company following the acquisition, the company said.
“Team17 is the perfect home for StoryToys as we enter into this incredible new chapter,” he said. “Our goal is to be the number one provider of edutainment content for young children. Collaborating with Team17 will make that a faster and more exciting journey.”
The pandemic has fuelled a rise in demand for educational apps aimed at the pre-school audience, and one that Team 17 is confident will continue in the coming years. Figures from Technavio forecast the the global educational apps market will grow by more than $46 billion between 2020 and 2024.
Debbie Bestwick, chief executive of Team17, said the shared culture and values of the two companies were perfectly aligned.
“In StoryToys, we are acquiring a highly creative and successful team whose ability to both entertain and educate children is truly best in class. Their track record is without question, but the depth of talent that exists within the business gives us an unrivalled position within a hugely exciting and high-growth edutainment area,” she said.
“We look forward to working closely with the whole StoryToys team and are delighted to be able to not only support their ambitious growth prospects but to provide a strong and stable platform to accelerate their development. Team17 prides itself on its culture and on embracing ambitious management teams – today’s announcement is an example of how we intend to make that a reality.”