Castles are not very energy efficient, so the money is probably going to pay the energy bill.
7 million doesn't go very far when you look at his team, actually. InExile and Obsidian have the benefit of being established studios with money already coming in from other projects to keep the doors open and the light on. Plus they've developed some products already, nothing fancy, but it costs money to make anything. If they said they secured funding from a publisher or something, then I would be worried. This is from their website, btw: