Andreessen Horowitz Is Raising a VC Fund to Invest in Gaming Startups
- Andreessen Horowitz is raising a venture fund for investing in gaming startups, sources say.
- The premier firm seeks to back both gaming studios and tech companies related to gaming.
- Partners Andrew Chen and Jonathan Lai have led most of firm’s gaming investments so far.
Andreessen Horowitz is raising a new venture fund that’s expressly for gaming startups, building on a recent spree of investments in companies like Mountaintop, Singularity 6, and Elodie, according to three people familiar with the matter.
The fund has been in the works for several months, according to two sources. When it closes, it will be the sixth fund Andreessen Horowitz has rolled out in 18 months. The titanic $2.2 billion crypto fund was the firm’s largest sector-specific fund ever.
The firm is also seeking to hire a general partner to lead the fund. It made an offer to one individual who declined, a source said.
Andreessen Horowitz did not immediately respond to a request for comment.
Sprinting to back the next Roblox
There’s been a surge of gaming-specific funds over the last decade, but they’re mostly small vehicles of less than $200 million, according to a report by Evan Van Zelfden, the managing director of Games One, an advisory firm.
The interest in gaming from a flagship firm indicates the sector’s growth, as millions of people headed indoors for long periods during the pandemic lockdowns. The video-game industry made more money last year than global movies and North American sports industries combined, according to data from market intelligence firm IDC.
After it led a funding round for Roblox, valuing the online game company at $4 billion, Andreessen Horowitz began plugging more money into gaming. It’s backed startups such as Parsec (acquired by Unity), Sleeper, Forte, Mainframe Industries, Lowkey, and others — investing in both gaming studios and tech companies related to games.
Liz Hafalia/The San Francisco Chronicle via Getty Images
To be sure, Andreessen Horowitz isn’t new to the sector. The firm cinched its first hulking exit in gaming when Facebook bought Oculus for $2 billion in 2014. It’s also an early investor in Sandbox VR, a startup that’s bringing virtual reality experiences to malls and stores. That company impressed the firm so much that, in 2019, some partners flew back from Las Vegas to hammer out a $68 million deal at an In-N-Out in the middle of the night.
Andrew Chen, a general partner at Andreessen Horowitz, who’s led many of its gaming investments, told VentureBeat reporter Dean Takahashi in an interview last year that the firm seeks to back the alumni of blockbuster gaming studios. Chen makes a pitch to those teams spun out of Riot Games, Blizzard, and
Epic Games
that they could finance their games using publisher money — and hand over their IP and creative direction — or raise money from VCs.
“It allows young teams with a lot of hustle, teams with a lot of creative vision and impact, to be able to build the games that they want on their terms and bring them to market directly, where they have a direct relationship with their customers,” Chen told Takahashi. “Then they can build it into potentially a multi-billion-dollar outcome.”
Jonathan Lai, an investing partner at Andreessen Horowitz, has deep ties to those networks. He previously worked as a product manager at League of Legends developer Riot Games and led the games investments team at Tencent.
The investing duo is even approaching those entrepreneurs before they begin fundraising.
When Patrick Wyatt, the second employee at Blizzard, started his own game studio, he told VentureBeat that the partners “twisted our arms to do a presentation.” They agreed to fund it before the founders left the room.
Credit: Source link
Comments are closed.