? Fundraising
The Games Fund is a new early-stage fund focused on investments in the video games industry, led by Maria Kochmola and Ilya Eremeev (previously leading investments in MGVC, the corporate venture arm of MY.GAMES), GEM capital (investment company), and ex-Riot CTO Sergey Titov
Initially, the founders planned to attract $30m, but during the first three months of fundraising they quickly exceeded the targeted volume, and now plan to bring it to $50m by the end of the summer
Currently, The Games Fund is looking for gaming entrepreneurs, strategic, and institutional investors who would like to become limited partners. A notable point here is that over 15% of the initial fund size was committed by the founders of The Games Fund
Around 80% of the funding came from the entrepreneurs/founders of gaming companies, including Plarium, Easybrain, Melsoft Games, Deus Craft, Aream, and many others
? Investment Strategy
Mission — Being the first gaming-dedicated VC fund with a particular focus on the Eastern European region, The Games Fund allows local game developers to gain access to global capital. The fund’s management team has expertise in the gaming market, as well as access to international investors, and deep understanding of local markets
Geography — The team plans to dedicate most of the funds (up to 70%) to invest in the gaming companies in Russia&CIS region, while the remaining part will go towards Western European and American regions
Stage & Platform — The Games Fund will primarily invest in mobile game developers with a strong vision and established concept, though having a prototype would significantly increase the chances of being funded. Nevertheless, the fund is also ready to invest in premium PC&console game developers, as well as invest in tech companies, which may support other portfolio studios with analytics, ads, monetization, or other gaming-related solutions
Use of Funds — The fund plans to close more than 20 Seed/Series A rounds over the next two-three years with an average ticket size of $1-3m. Moreover, around 20% of the capital will go towards follow-on investment activity
? IG Note
We observe an increased interest in gaming companies located in Russia&CIS — both on M&A and investment sides. Most sizable transactions with a total value of over $1.2B include:
Embracer Group has acquired mobile game developer Easybrain for up to $765m and PC&console games developer and publisher Saber Interactive for $552m
AppLovin has acquired casual games developer Belka Games for up to $153.5m
Enad Global 7 has acquired Russian PC MMORPG games publisher Innova for ~$132m)
MoonActive has acquired Belarus-based mobile casual games developer Melsoft for an estimated valuation of $300m
Tencent has invested an undisclosed sum in Russian PC&console game developer Mundfish
Gunzilla Games has raised its first investment of $25m
Russian video game production company 110 Industries has raised $20m
Russian mobile and social game developer Nexters aims to go public via SPAC, targeting a valuation of $1.9B. The company plans to start the M&A activity within the Eastern European region
We think that The Games Fund will have a clear first-mover advantage and great expertise fit to become a leading independent VC fund in the region.
? Portfolio
In December 2020, The Games Fund has invested in Belarus-based Purple Games, a mobile game developer behind match-3 title Greenvale
Currently, The Games Fund is finalizing several other deals and is expected to have four studios in its portfolio by the end of April
