The gaming industry is experiencing a strong resurgence in venture capital, with a significant increase in both funding and deal volume. According to Konvoy Ventures, a venture capital firm specializing in the video gaming industry, the first quarter of 2024 saw $594 million in gaming VC funding, a 94% increase from the previous quarter. Additionally, deal volume rose by 28%, with 124 deals completed. Konvoy predicts that the gaming market is expected to reach $225 billion by 2029, up from $189 billion in 2023.
The Web3 industry is also being driven by blockchain games. DappRadar reports that Web3 games accounted for 30% of all DApp activity in the first quarter of 2024, attracting 2.1 million active wallets daily. During the quarter, Polygon saw a significant increase in new wallets, with over 1.1 million added, representing a 429% increase from the previous quarter.
To keep up with the bull cycle, venture capital firms are raising capital for funds. In April, notable VCs such as Andreessen Horowitz, Paradigm, and Pantera Capital raised capital.
In April, several startups in the gaming industry raised capital. Tevaera, a gaming firm, completed a $5 million funding round led by Nomura’s Laser Digital. The funding will support the development of a gaming ecosystem utilizing zkSync’s ZK Stack. Other investors in the startup include Hashkey Capital, Fenbushi Capital, Matter Labs, Draper Dragon, Faculty Group, Crypto.com Capital, Cogitent Ventures, Selini Capital, DWF Labs, Morningstar Ventures, and others. Tevaera has been working on the zkSync platform for nearly two years, focusing on a game-IP-first strategy to address challenges in the Web3 gaming infrastructure. The company has expanded its community to include over 850,000 Soulbound Gamers from more than 100 countries in the past year.
AVALON, an independent game studio, raised $10 million in a funding round 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 go towards the development of AVALON’s inaugural game, also named 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 Microsoft, Sony, Capcom, Infinity Ward, and Ubisoft, who have contributed to franchises like Call of Duty, EverQuest, and Assassin’s Creed. AVALON is currently under development for PC and cloud streaming.
Uncharted, a company focused on the “gamification layer of crypto,” secured $1.7 million in seed funding. The funding round was led by Shima Capital, with contributions from The Spartan Group, Double Peak Group, Devmons, 32-bit, D64 Ventures, Trinity Labs, LiquidX, and several individual investors, including Robbie and James Ferguson from Immutable. Uncharted aims to create a GameFi ecosystem where financial incentives are integrated into gameplay. Their first game, “Gangster Arena,” generated 150 ETH in-game transactions during its first season. Uncharted plans to release “Gangster Arena 2” and other projects in the future, with the funds raised going towards game development and supporting 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 at the intersection of blockchain and artificial intelligence. Investors in the new fund include XVentures, Richard Ma from Quantstamp, and previous backers of VANTA DAO, Digital Currency Group, and Polychain Capital. Contango, founded in 2020, is a Canadian firm focused on promoting global decentralized systems, particularly decentralized artificial intelligence. The firm aims 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 closed a $38 million Series A funding round. The startup is 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 to promote the adoption of the Move programming language across blockchains. Movement Labs was founded in 2022 by Rushi Manche and Cooper Scanlon, early builders in the Move ecosystem. The company is also focusing on expansion in the Asia-Pacific region.