The gaming industry is experiencing a significant resurgence in venture capital (VC) funding and deal volume. According to Konvoy Ventures, a VC firm specializing in the gaming industry, the first quarter of 2024 witnessed a 94% increase in gaming VC funding, reaching $594 million. Additionally, deal volume rose by 28%, with 124 deals completed during this period.
Konvoy Ventures predicts that the gaming market is expected to reach $225 billion by 2029, surpassing the $189 billion mark in 2023.
The rise of blockchain games is also contributing to the growth of the Web3 industry. In the first quarter of 2024, Web3 games accounted for 30% of all decentralized application (DApp) activity, attracting 2.1 million active wallets daily, according to DappRadar. During this quarter, Polygon, a popular blockchain platform, experienced a 429% increase in new wallets, drawing in over 1.1 million new users.
To keep up with the bullish trend, venture capital firms are actively raising capital for funds. In April, notable VC firms such as Andreessen Horowitz, Paradigm, and Pantera Capital were among those raising funds.
Cointelegraph’s VC Roundup highlights some of the startups that successfully raised capital in April:
1. Tevaera: Nomura’s Laser Digital led a $5 million funding round for Tevaera, a gaming firm. The funding will support the development of a gaming ecosystem utilizing zkSync’s ZK Stack. Other investors include Hashkey Capital, Fenbushi Capital, Matter Labs, and more. Tevaera has been focusing on a game-IP-first strategy to address challenges in Web3 gaming infrastructure. Over the past year, the company has expanded its community to include more than 850,000 Soulbound Gamers from over 100 countries.
2. AVALON: Independent game studio AVALON secured $10 million in funding, co-led by BITKRAFT Ventures and HASHED. Additional participants include Coinbase Ventures, Spartan Capital, Foresight Ventures, and more. The investment will be used to develop their inaugural game, also named AVALON, which is a multiplayer game that allows players to explore different worlds while retaining their assets and progress. AVALON’s leadership team consists of former members from major gaming companies such as Microsoft, Sony, Capcom, and Ubisoft.
3. Uncharted: Uncharted raised $1.7 million in seed funding to develop the “gamification layer of crypto.” The seed round was led by Shima Capital, with contributions from The Spartan Group, Double Peak Group, and several individual investors. Uncharted aims to create a GameFi ecosystem where financial incentives are integrated into gameplay. The company’s first game, “Gangster Arena,” generated 150 ETH in-game transactions during its first season.
4. Contango Digital Assets: Venture capital firm Contango Digital Assets announced the initial close of the Contango Blockchain x AI Fund, raising $5 million. The fund aims to invest up to $10 million in North American seed round companies at the intersection of blockchain and artificial intelligence. Investors in the fund include XVentures, Quantstamp’s Richard Ma, and previous backers of VANTA DAO, Digital Currency Group, and Polychain Capital.
5. Movement Labs: Binance Labs, the investment arm of Binance, made an undisclosed investment in Movement Labs, a blockchain development company. Movement Labs recently closed a $38 million Series A funding round. The startup focuses on building an ecosystem of Modular Move-based blockchains and plans to use the funds to expand its range of open-source tooling, frameworks, and protocols. Movement Labs also aims to expand its presence in the Asia-Pacific region.
Overall, the gaming industry’s strong comeback in venture capital funding, along with the rise of blockchain games, indicates a promising future for the industry. With the support of venture capital firms, startups in the gaming space are poised to make significant strides in innovation and technological advancements.