Funds are the lifeblood of the startup world, providing the means to turn their boldest ideas into reality. Within this landscape, the gametech industry has emerged as a dominant force in the startup ecosystem, capturing the attention and interest of entrepreneurs, investors, and gamers alike. The fusion of technology and entertainment has propelled gametech startups to remarkable success, attracting substantial investments and generating significant traction in recent times. In this article, we delve into the top 20 funds that are backing gametech startups in 2023, highlighting the increasing enthusiasm and financial support for this dynamic sector.
Securing funding is of utmost importance for startups, and even more so for gametech ventures, given the high costs of development and the continuous need for innovation to maintain a competitive edge. With adequate financial backing, these startups are empowered to explore the frontiers of technology, create cutting-edge gaming experiences, and enhance user engagement. Without such crucial funding, gametech startups may face challenges realizing their full potential and bringing their imaginative visions to life.
Publishers vs Investors
When discussing startup funding, it’s essential to address the distinction between two main business models prevalent in the game industry: investors and publishers. In this sector, game developers have the choice to seek funding from either investors or enter into collaborations with publishers.
Publishers play a significant role by offering game developers financial support, marketing assistance, and distribution resources. In return, publishers usually acquire exclusive rights to publish and distribute the game, along with a percentage of the game’s sales revenue. This partnership structure allows publishers to have a vested interest in the game’s success and fosters a mutually beneficial relationship that promotes growth and market exposure.
Prominent instances of game industry publishers include:
- Electronic Arts (EA)
- Devolver Digital
- Team17 Digital
- tinyBuild
- 11 bit Studios
On one hand, investors provide funding to game developers but expect an equity stake in the company or a share of future revenue in return. Their primary goal is to achieve a profitable return on their investment. Conversely, publishers are more focused on ensuring the game’s success rather than purely seeking financial gains. In some cases, a publisher may also act as an investor, blurring the lines between their traditional roles.
A crucial distinction between investors and publishers lies in their levels of involvement in game development. Investors typically take a more hands-off approach, allowing developers to lead the creative process independently. On the other hand, publishers tend to be actively engaged, striving to ensure that the game meets quality standards and aligns with their marketing strategies. They may exert influence over various aspects of the game, including gameplay mechanics and narrative elements.
While both investors and publishers play vital roles in the game industry, their motivations and levels of involvement differ significantly. Investors prioritize financial returns, while publishers contribute funding and actively participate in shaping the game to maximize its commercial success.
Types of investors
When exploring investment opportunities in the gametech/gaming industry, I observed certain types of investors that are more prevalent than others. These include:
- Angels: Angel investors are high-net-worth individuals who provide smaller amounts of capital to newly established startups. They often have a personal connection with the company or its founders, and their investment style tends to be less interventionist compared to other funding sources. Although angel investors may offer smaller investments than venture funds, they bring significant expertise in the game industry and can provide valuable mentorship to startups.
- Venture Capitals (VCs): Venture capitalists are organizations that pool funds from multiple investors and use them to invest in more established companies. Unlike angel investors, venture funds take an active role in the companies they invest in and prioritize generating returns for their shareholders. These funds usually allocate more substantial amounts of capital compared to angel investors.
- Equity crowdfunding: Equity crowdfunding is a method of crowdfunding that allows individuals to invest funds in a company in return for an ownership share. This funding approach can be advantageous for game developers who are looking to raise capital from a broader base of investors. However, it is not as commonly used as “rewards-based” crowdfunding platforms like Indiegogo and Kickstarter, where supporters receive non-equity rewards for their contributions.
In this article, I will focus on the first two types of investment as they appear more dependable to me and are also less subject to government regulations.
In the realm of startup funding, companies have access to various stages of financing as they advance and achieve different milestones. Here is an overview of some typical funding stages and their distinctions:
- Pre-Seed: The pre-seed stage marks the initial phase of a startup’s journey, where the focus is on developing the business concept or prototype. Funding at this stage usually comes from personal savings, contributions from friends and family, or angel investors. Pre-seed funding is crucial as it aids founders in validating their ideas, conducting market research, and creating a minimum viable product (MVP).
- Seed: After the pre-seed stage, startups enter the seed stage, which entails securing additional capital to advance the product or service and expand the business. Seed funding is typically sourced from angel investors, venture capital firms, or specialized seed funds. During this stage, startups concentrate on fine-tuning their business model, expanding their team, and acquiring their initial customer base.
- Series A: Series A funding represents the subsequent substantial round of financing after the seed stage. Usually, it occurs when a startup has accomplished specific milestones, such as showing market traction, generating revenue, or amassing a substantial user base. Venture capital firms typically provide Series A funding, involving more substantial investment amounts to propel the startup’s growth, bolster its infrastructure, and facilitate expansion into new markets.
- Series B, C, D, and Beyond: After the Series A round, subsequent funding rounds are denoted as Series B, Series C, Series D, and beyond. These rounds signify additional financing stages as the startup continues to advance and requires additional capital for expanding its operations, developing products, penetrating the market, and scaling its business. The size of these funding rounds typically grows as the startup matures and attracts larger investments from venture capital firms, private equity firms, or institutional investors.
It is essential to recognize that the precise definitions and terminology for funding rounds can differ in various regions or industries. Moreover, the criteria for each funding stage may be influenced by factors like the startup’s industry, growth trajectory, and investor preferences. Familiarizing oneself with the various funding stages enables startups to tailor their fundraising endeavors to the appropriate stage and attract investors best suited to meet their growth requirements.
Angel investors
Angels, the often overlooked champions of the startup world, are usually well-to-do individuals who make smaller investments in emerging ventures. Their unwavering enthusiasm for the projects often stems from a personal connection to the company or its founders, driving their belief in the project’s promise. Although their investment style is typically more hands-off, angels bring invaluable industry expertise and can act as mentors for game startups.
Interestingly, several notable angel investors have left their mark in the game industry:
- Greg Richardson: Serving as the managing partner at Juno Capital and formerly the CEO of Bioware, Richardson brings a wealth of experience and expertise to the forefront. His involvement as an angel investor underscores his dedication to fostering innovation in the gaming domain.
- Chamath Palihapitiya: Renowned for his early investments in social gaming, Palihapitiya was an angel investor for Playdom, a company that achieved significant success in the social gaming sphere. His entrepreneurial insights and strategic guidance have played a pivotal role in shaping the landscape of the game industry.
- Andrew Goldman: Not only is Goldman the founder and CEO of Writable Inc., but he also served as the studio head and former CEO at Pandemic Studios. With his profound understanding of game development and business operations, Goldman offers invaluable mentorship and support to startups in the gaming sector.
- Shervin Pishevar: As the Chairman and founder of SGN, a leading mobile game developer, Pishevar’s expertise in the gaming industry is unparalleled. His role as an angel investor showcases his commitment to nurturing the growth of promising game startups.
- Ray Muzyka: Muzyka, the Founder and CEO at ThresholdImpact, boasts a strong background in the game industry. As a successful entrepreneur, he provides strategic guidance and mentorship to startups, empowering them to navigate challenges and capitalize on opportunities in the gaming market.
These esteemed angel investors not only provide financial support but also leverage their industry expertise and networks to empower game startups. Their active involvement exemplifies the mutually beneficial relationship between seasoned individuals and visionary entrepreneurs, driving growth and propelling the game industry to unprecedented heights.
VC funds
In this part of article I want to demonstrate the list VCs that can help budget startups in no particular order, but the ones I noticed more than others while exploring the topic:
- BITKRAFT Ventures
Year Founded: 2015
Size: 11–50
BITKRAFT Ventures is a gaming-focused venture capital firm founded in 2015 and based in San Francisco, California. Their expertise lies in offering early-stage and seed investments to gaming, Esports, and interactive media companies and startups. With a widespread global presence through various offices, the firm has successfully managed three investment funds, facilitating a total of 67 investments. To date, they have completed exits from two of their investments.
2. Galaxy Interactive
Year Founded: 2018
Size: 1–10
Galaxy Interactive is a gaming venture capital firm founded in 2018 and based in New York, USA. Their primary focus lies in investing in technology companies and those dedicated to interactive media at various stages of funding. Over the past three years, the firm has operated a single investment fund, leading to 65 investments in startups. However, they have only completed an exit from one of their investments thus far.
3. Tencent
Year Founded: 1998
Size: 10,000+
Tencent, a prominent Chinese company, holds a pivotal position in offering venture capital funding to the gaming industry across diverse funding stages. Established in 1998 and headquartered in Shenzhen, Tencent has made an impressive 621 investments in a wide array of companies, with a substantial emphasis on the gaming sector. Notable examples of their investments include Call of Duty Mobile and Call of Duty Online. As a testament to their success, Tencent has successfully exited from 113 of these investments.
4. Makers Fund
Year Founded: 2017
Size: 1–10
Makers Fund, an American venture capital firm, was established in 2017 and is headquartered in San Francisco. Their primary focus is on early-stage startups, particularly those in the interactive entertainment sector, which includes gaming. Operating with a single investment fund, Makers Fund has invested in a total of 57 startups since its inception. To date, they have successfully exited from six of these investments.
5. London Venture Partners
Year Founded: 2010
Size: 1–10
London Venture Partners, a British venture capital firm established in 2010 and located in London, specializes exclusively in providing investments for the gaming sector and its ecosystem. Their offerings include seed funding and early-stage investments, aimed at helping startups bring their innovative ideas to life. Over the past decade, the company has operated three investment funds, resulting in a total of 71 investments made. As of now, they have successfully completed exits from twelve of these investments.
6. Remagine Ventures
Year Founded: 2017
Size: 1–10
Remagine Ventures is an Israeli venture capital firm founded in 2017, with its headquarters situated in Tel Aviv. The company specializes in investing in diverse tech companies, particularly those in the digital entertainment sector. Remagine Ventures places a primary emphasis on early-stage funding to support startups.
Over the course of its four years of operation, Remagine Ventures has effectively managed two investment funds, enabling the firm to make a total of nine investments during this period. As of now, the company has not completed any exits from its investments.
7. 1Up Ventures
Year Founded: 2019
Size: 1–10
1Up Ventures is a gaming-focused venture capital firm founded in 2019 and located in Kirkland, USA. With a team possessing substantial expertise in the gaming industry, 1Up Ventures offers investment support, technical assistance, and industry insights to assist gaming businesses in advancing to the next level.
Since its establishment in 2019, 1Up Ventures has made a total of 20 investments in gaming companies, providing crucial support and resources to help them thrive in the competitive market.
8. LEGO Ventures
Year Founded: 2018
Size: 11–50
LEGO Ventures, a Dutch venture capital firm, was established in 2018 as a subsidiary of the well-known LEGO company. Their core focus lies in creativity, learning, and gaming, and they invest in businesses that utilize digital play to enhance children’s learning and development.
Over the past three years since its founding, LEGO Ventures has made a total of 11 investments in the sector, supporting companies that align with their mission. Presently, the company has achieved successful exits from two of these investments, demonstrating their commitment to promoting innovation and growth in the realm of digital play and children’s education.
9. Creandum
Year Founded: 2003
Size: 11–50
Creandum, a Swedish venture capital firm established in 2003 with its headquarters in Stockholm, focuses on investing in technology companies, encompassing both enterprise and consumer software. Additionally, the firm extends its investments to the gaming industry.
Over the years since its inception, Creandum has made a significant number of investments, reaching a total of 183. As of now, the company has successfully exited from 33 of these investments, showcasing their expertise in supporting successful ventures and driving growth in the technology and gaming sectors.
10. Velo Partners
Year Founded: 2013
Size: 1–10
Velo Partners is a British venture capital firm founded in 2013, based in London. Their expertise lies in seed and Series A funding, with a primary focus on investing in gaming and gambling businesses, both within the UK and on a global scale.
During the past eight years, Velo Partners has actively invested in 31 growing companies, contributing to their development and expansion. Additionally, the company has been involved in acquisitions, with a successful acquisition of another business. Throughout their operations, Velo Partners has achieved successful exits from three of its investments, highlighting their dedication to fostering growth and driving success in the gaming and gambling sectors.
11. Benchmark
Year Founded: 1995
Size: 11–50
Benchmark, an American venture capital firm established in 1995 and headquartered in San Francisco, California, boasts a broad portfolio, investing in various technology companies, including those operating in the gaming industry.
Throughout its history, Benchmark has effectively managed six investment funds, providing ample resources to make a substantial total of 629 investments in growing businesses. Impressively, the company has successfully exited from 170 of these investments, illustrating their proficiency in supporting and driving success in the technology and gaming sectors.
12. VGames
Year Founded: 2020
Size: 1–10
VGames, an Israeli venture capital firm, emerged in 2020 with its headquarters based in Tel Aviv. The company has a clear and exclusive focus on supporting the development of gaming companies, offering early-stage funding and additional soft support to these businesses.
Since its inception last year, VGames has successfully managed a single investment fund, empowering them to make six investments in gaming companies. As of now, the firm has not completed any exits from its investments, underscoring their commitment to fostering growth and innovation in the gaming industry.
13. Griffin Gaming Partners
Year Founded: 2019
Size: 1–10
Griffin Gaming Partners is a venture capital firm founded in 2019 and located in Los Angeles, Mexico. With its sole focus on the gaming industry and ecosystem, the company dedicates its investment efforts to support this dynamic sector. Griffin Gaming Partners provides funding across different stages of business development, aiming to nurture growth and innovation.
In the two years since its establishment, Griffin Gaming Partners has efficiently managed a single investment fund, leading to 15 investments in the gaming industry. As of now, the firm has successfully exited from only one of these investments, demonstrating their commitment to long-term partnerships and supporting the development of gaming ventures.
14. Konvoy Ventures
Year Founded: 2019
Size: 1–10
Konvoy Ventures is a gaming venture capital firm established in 2019 and headquartered in Denver, Colorado, USA. Their core focus lies in making investments in the gaming and esports industries, particularly during the early stages of a business’s development.
During the two years since its founding, Konvoy Ventures has effectively operated with a single investment fund, providing essential support to 23 gaming companies. Additionally, the firm has achieved successful exits from two of these investments, underscoring their expertise in identifying and supporting promising ventures within the gaming and esports sectors.
15. WestSummit Capital
Year Founded: 2009
Size: 11–50
WestSummit Capital is an American venture capital firm established in 2009, with its headquarters situated in Menlo Park, California. Their primary focus lies in investing in technology companies, spanning across North America and China. Notably, the firm has also made significant investments in the gaming industry.
Over the course of the past twelve years, WestSummit Capital has effectively managed three investment funds, facilitating a total of 35 investments in such businesses. The company has demonstrated successful exits from 13 of these investments, highlighting their proficiency in supporting and driving growth in the technology and gaming sectors.
16. Transcend Fund
Year Founded: 2020
Size: 1–10
Transcend Fund is an American gaming venture capital firm, established in 2020, and headquartered in San Francisco, California. The company is dedicated to investing in gaming companies and those involved in interactive entertainment. Their primary objective is to provide early-stage funding to support these businesses in reaching their full potential.
Since its inception, Transcend Fund has invested in a total of twenty-one startups, providing crucial financial support and resources to foster their growth and development. As of now, the company has not completed any exits from these investments, demonstrating their commitment to nurturing and supporting the gaming industry’s innovative ventures.
17. Lumikai
Year Founded: 2019
Size: 1–10
Lumikai is an Indian gaming venture capital firm, founded in 2019, and headquartered in New Delhi. It takes pride in being the first gaming and interactive media VC in India. Lumikai specializes in early-stage investments in gaming businesses and has already attained significant achievements.
Since its establishment two years ago, Lumikai has efficiently operated with a single investment fund, enabling the company to make five investments in the gaming sector. Furthermore, Lumikai has successfully completed an exit from one of these investments, demonstrating their ability to identify promising opportunities and support the growth of gaming ventures in India.
18. MGVC
Year Founded: 2020
Size: 1–10
MGVC is a Russian gaming venture capital firm established in 2020, headquartered in Moscow. The company’s primary objective is to foster the development and growth of new gaming companies within Russia. Backed by a team with substantial expertise in the gaming industry, MGVC provides valuable support and guidance to the companies they invest in.
Since its founding last year, MGVC has successfully managed an investment fund, which has facilitated a total of nine investments in the gaming sector. As of now, the company has not exited from any of these investments, highlighting their commitment to nurturing and supporting the growth of gaming ventures in Russia.
19. Hiro Capital
Year Founded: 2019
Size: 1–10
Hiro Capital is a gaming venture capital firm headquartered in Luxembourg. Established in 2019, the company focuses its investment efforts on esports, gaming, and digital sports. Hiro Capital primarily provides funding during the Series A and Series B stages of investment and operates across Europe.
Since its inception two years ago, Hiro Capital has efficiently managed a single investment fund, which has enabled the company to make 19 investments in gaming companies. Notably, Hiro Capital has successfully completed an exit from one of these investments, exemplifying their commitment to supporting and driving success in the gaming and esports industries.
20. Gamerforce Ventures
Year Founded: 2019
Size: 1–10
Gamerforce Ventures is a Singaporean gaming venture capital firm established in 2019, with its headquarters located in Singapore. The company’s primary expertise lies in offering investment and technical support to the esports and gaming industries. They typically focus on investments between the seed funding and Series A funding stages, supporting early-stage startups.
Since its founding two years ago, Gamerforce Ventures has efficiently managed two investment funds, allowing the company to make three investments in the gaming sector. As of now, the firm has not completed any exits from its investments, highlighting their dedication to nurturing and supporting the growth of startups in the gaming and esports industries.
Is there another way to fund your startup?
Securing funding for a startup is a challenging endeavor, and there are numerous pitfalls one can encounter during the search for financial support. That’s why in the upcoming article series, I will delve into the subject of effectively identifying investors, showcasing compelling aspects to grab their attention, and covering all the essential aspects you need to know to secure funding. Stay tuned for valuable insights and advice!
