Venture capital is experiencing a powerful resurgence in the gaming industry, with a significant increase in both funding and deal volume.
According to Konvoy Ventures, a venture capital firm that specializes in the video gaming industry, gaming VC funding reached $594 million in the first quarter of 2024, representing a remarkable 94% surge from the previous quarter. Additionally, the number of deals completed rose by 28%, with a total of 124 deals.
Konvoy Ventures predicts that the gaming market will grow to reach $225 billion by 2029, up from $189 billion in 2023.
The rise of blockchain games is also driving the growth of the Web3 industry. In the first quarter of 2024, Web3 games accounted for 30% of all DApp activity, attracting 2.1 million active wallets daily, according to DappRadar. During this quarter, Polygon saw a staggering increase of 429% in new wallets, drawing in over 1.1 million new users.
Venture capital firms are preparing to keep up with the bullish market cycle. In April, notable VCs raising capital for funds included Andreessen Horowitz, Paradigm, and Pantera Capital.
Cointelegraph’s VC Roundup highlights some of the startups that successfully raised capital in April.
One of these startups is Tevaera, a gaming firm that recently completed a $5 million funding round led by Nomura’s Laser Digital. The funding will support the development of a gaming ecosystem that utilizes zkSync’s ZK Stack. Other investors supporting Tevaera include Hashkey Capital, Fenbushi Capital, Matter Labs, Draper Dragon, Faculty Group, Crypto.com Capital, Cogitent Ventures, Selini Capital, DWF Labs, Morningstar Ventures, and others. Over the past year, Tevaera has grown its community to include more than 850,000 Soulbound Gamers from over 100 countries.
Another startup, AVALON, an independent game studio, secured $10 million in funding co-led by BITKRAFT Ventures and HASHED. Other participants in the funding round include Coinbase Ventures, Spartan Capital, Foresight Ventures, LiquidX, and Momentum6. The investment will be used to develop AVALON’s inaugural game, also called AVALON, a multiplayer game that allows players to explore various worlds while retaining their assets and progress. The leadership team at AVALON includes former members of major gaming companies such as Microsoft, Sony, Capcom, Infinity Ward, and Ubisoft, who have contributed to popular franchises like Call of Duty, EverQuest, and Assassin’s Creed. AVALON is currently in development for PC and cloud streaming.
Uncharted, another startup, raised $1.7 million in seed funding to develop the “gamification layer of crypto.” Shima Capital led the funding round, with contributions from The Spartan Group, Double Peak Group, Devmons, 32-bit, D64 Ventures, Trinity Labs, LiquidX, and several individual investors. Robbie and James Ferguson, brothers and founders of Immutable, also participated in the funding. Uncharted aims to create a GameFi ecosystem where financial incentives are integrated into gameplay. Its first game, “Gangster Arena,” generated 150 ETH in-game transactions during its initial season. The company plans to release “Gangster Arena 2” and other projects in the future, with the funds raised being used to support game development and the ecosystem.
Contango Digital Assets, a venture capital firm, announced the initial close of the Contango Blockchain x AI Fund, raising $5 million in capital. The fund aims to invest up to $10 million in North American seed round companies that operate at the intersection of blockchain and artificial intelligence. XVentures, Richard Ma of Quantstamp, and previous backers of VANTA DAO, Digital Currency Group, and Polychain Capital are among the investors in the new fund. Contango, founded in 2020, is a Canadian firm dedicated to promoting decentralized systems globally, particularly decentralized artificial intelligence. The firm’s managing partner, Mike Grantis, stated that their goal is to back projects that are building towards the emergence of the first global Artificial General Intelligence by decentralizing governance and incorporating open-source development with native blockchain incentives.
Binance Labs, the investment arm of Binance, has made an undisclosed investment in Movement Labs, a blockchain development company. Movement Labs recently concluded a $38 million Series A funding round. The startup is building an ecosystem of Modular Move-based blockchains and intends to use the funds to expand its range of open-source tools, frameworks, and protocols to encourage the adoption of the Move programming language across various blockchains. Movement Labs, founded in 2022 by Rushi Manche and Cooper Scanlon, who were early builders in the Move ecosystem, is also focused on expanding its presence in the Asia-Pacific region.