The gaming sector is observing a robust resurgence in venture capital interest, with significant increases in both the investments received and the number of deals struck.
An analysis by Konvoy Ventures, a venture capital firm with a focus on the gaming arena, indicates that gaming VC funding experienced a substantial jump to $594 million in the first quarter of 2024, which is an impressive 94% growth compared to the prior quarter. The frequency of deals also escalated by 28%, with a total of 124 deals being finalized.
Forecasts by Konvoy suggest that by 2029, the gaming market could swell to a value of $225 billion from the $189 billion it was in 2023.
Parallel to this, the Web3 sector is gaining momentum, largely fueled by blockchain-based games. As per data from DappRadar, blockchain games contributed to 30% of the decentralized application activities in the first quarter of 2024, with 2.1 million active wallets interacting daily. Specifically, the network Polygon saw an inflow of over 1.1 million new wallets, denoting a 429% increase from the previous quarter.
With the uptrend in the industry, venture capital firms are actively raising funds to keep up with the growth. Notable firms that have been accumulating capital for their funds in April include Andreessen Horowitz, Paradigm, and Pantera Capital.
A roundup of venture capital movements in the gaming sector highlighted several startups that have successfully secured investments during the month.
Leading a $5 million investment round, Nomura’s Laser Digital has played a pivotal role in backing gaming firm Tevaera. The funds will fuel the development of a gaming ecosystem built on the zkSync’s ZK Stack. Among the investors backing this initiative are Hashkey Capital, Fenbushi Capital, Matter Labs, Draper Dragon, Faculty Group, Crypto.com Capital, Cogitent Ventures, Selini Capital, DWF Labs, Morningstar Ventures, and more. Tevaera, which has been working on the zkSync platform for almost two years, pursues a game-IP-first strategy to tackle the hurdles in Web3 gaming infrastructure. Over the past year, Tevaera has managed to grow its community to encompass over 850,000 Soulbound Gamers from upwards of 100 countries.
Independent game studio AVALON has garnered a $10 million investment for their debut title in a collaborative funding round led by BITKRAFT Ventures and HASHED. Others contributing to the funding include Coinbase Ventures, Spartan Capital, Foresight Ventures, LiquidX, and Momentum6. The capital infusion is earmarked for the advancement of their flagship multiplayer game, AVALON, which enables players to navigate different worlds while preserving their assets and progress. AVALON, which was founded in 2021, boasts a team of industry veterans from Microsoft, Sony, Capcom, Infinity Ward, and Ubisoft.
Uncharted, another emerging name in the sector, has raised $1.7 million in a seed round to develop what it terms as the ‘gamification layer of crypto.’ The round saw leadership from Shima Capital and participation from The Spartan Group, Double Peak Group, Devmons, 32-bit, D64 Ventures, Trinity Labs, LiquidX, and individual investors including Robbie and James Ferguson of Immutable. Uncharted’s vision is to weave financial incentives into the gaming experience, and its first game, ‘Gangster Arena,’ has already seen 150 ETH in transactions. The funds are allocated for further game development and ecosystem support.
Marking its territory in the confluence of blockchain and artificial intelligence, venture capital firm Contango Digital Assets has announced a $5 million initial close of the Contango Blockchain x AI Fund. The fund, which ultimately aims to invest up to $10 million in North American seed-stage companies, includes investors from XVentures, Quantstamp’s Richard Ma, and supporters of VANTA DAO, Digital Currency Group, and Polychain Capital. Contango, established in 2020, is devoted to fostering decentralized global systems, particularly decentralized AI.
Binance Labs has solidified its investment portfolio by injecting funds into Movement Labs, a blockchain development firm that has recently concluded a $38 million Series A round. Movement Labs is developing a suite of open-source tools, frameworks, and protocols to facilitate the adoption of the Move programming language across blockchain platforms. Founded in 2022 by early Move ecosystem builders, Movement Labs is also concentrating on expanding its presence in the Asia-Pacific region.
