Specialist firms raise $2 billion to date
(updated, August 2021)
current total: $2.051 billion
* March 26, 2021: 1Up Ventures announces $30 million fund
* April 6, 2021: Play Ventures announces $135 million Fund II
* April 15, 20201: The Games Fund announced $50 million fund
* Ludus Venture Studio added to list.
* Bitkraft vintages add $192 million and $52 million respectively.
* TRUST ESPORT Ventures added to list.
Original text, as published in February 2021:
Games Ône measures some 15 professional venture capital firms that specialize in the sector.
All were formed within a decade; there were no game-specific VC funds from 1972 to 2009.
The assets under management for all 15 firms total $1.577 billion.
(That number will likely increase with subsequent vintages. Currently, funds are seeking to raise an additional $950 million this year.)
The firms will draw down an estimated $315 million in management fees over their lifetime.
Based on performance, they may achieve additional earnings of $580 million from carried interest.
To meet expectations, their successful portfolio companies will need to achieve an estimated total lifetime value exceeding $47 billion through acquisition or public listing.
($47 billion expects the funds to own 10% of companies at exit. Outcomes depend on variables, including dilution, hurdles, and limited partners targeting a 12% return.)
Currently, the sector employs 125 souls. Across fifteen funds, there are 32 general partners, 5 senior partners, and 50 less senior members of the deal team. 26 admin staff, 2 legal counsel, 1 entrepreneur in residence, and 9 affiliated venture partners.
We project some 221,000 hours annually spent by these firms, producing value for their limited partners.
They are located in the world’s largest and most recognizable cities. New York, Santa Monica, Hong Kong, London, Berlin, Moscow, Denver, San Francisco, Singapore, Helsinki, Tel Aviv, Kirkland, and New Delhi.
More nascent firms are currently in the market, and we expect new records in fund size.
Career venture capitalists are typically less driven when successful. Game venture capitalists are driven by passion. We don’t see the founders of these firms “calling in rich” like their silicon valley counterparts.
Although the typical general partner in gaming is closer to retirement age, and it would be understandable if the average fund has a 15 year lifespan. Mainline VCs are obsessed with succession, and have a 50 year firm lifespan.
The modern gaming entrepreneur is more empowered than ever before via specialized VC, although they face increased competition for capital from other game start-ups.
Recent historical data suggests that 10% of total money raised is from game-specific VCs, while the remaining 90% comes from the broader VC ecosystem. The earlier stage, the less this is true, the later stage, the more so.
(Note that partners at mainstream firms who have a specialization in gaming do exist, but are beyond the scope of the 2021 Game VC Rank.)
Summary: the game business existed without dedicated venture capital for the first thirty-eight years | when game-venture began, it raised $1.5 billion in its first decade.
All eyes should be on this next decade..
Copyright © 2021, by Evan Van Zelfden. All Rights Reserved.