The start-up has raised money from Passion Capital, Velo (a games fund) and the founder of Lendable to finance video games developers.
Sugar, a lending platform for the video games industry, has raised a £1.5m Pre-Seed Financing Round Led by a number of venture capital firms.
The company provides quick, fully automated debt finance to help game and app studios scale marketing ahead of revenues from games. It also provides merchant advance loans on tax credits - VGTR credits - (video games tax relief, an HMRC rebate similar to R&D credits).
Video games have been a breakout area in 2020, in part prompted by the pandemic prompting accelerating digitisation.
Sugar, founded in 2019, will use the new cash to further develop its platform.
Malin Posern, Partner at Passion Capital said, “Flexible, quick and efficient financing for games studios and apps 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”.
Matt Frenchman (pictured), 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”.
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 coming years.