Funding Wrap: Gaming Startups Still a Hot Item for Venture Capitalists

Outside of gaming, crypto funding was quieter than usual this past week, but investors are still committing to startups building in the space

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Source: DALL·E

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key takeaways

  • Brevan Howard Asset Management has raised over $1 billion to invest in the crypto ecosystem
  • GEM Digital Limited has committed $50 million to decentralized farming protocol XION Finance

Play-to-earn gaming companies and services remain popular among investors looking to inject money into the crypto space.

Most recently, Andreesen Horowitz (a16z) funneled $6 million into Web3 startup Halliday, which allows its gaming clientele to buy and use digital assets in the metaverse. Hashed, a_capital, SV Angel and other investors also participated in the funding. 

In a blog post, Halliday co-founders Akshay Malhotra and Griffin Dunaif wrote, “We’re grateful that some of the best backers in the world share our passion for what we’re building.”

Vance Spencer, co-founder of Framework Ventures told Blockworks that gaming startups remain a popular investment for investors because three billion people in the world play games and half a billion people make less than $5 a day but have an internet connection.

“There’s a huge latent market for play-to-earn games,” Spencer said. 

Outside of gaming, crypto funding was quieter than usual this past week, but investors are still committing to startups building in the space.

Most notably, Brevan Howard Asset Management has raised over $1 billion from institutional investors to launch the largest crypto hedge fund ever. 

The European hedge fund has previously been wary of the crypto space, leaning to the side of caution before the bear market. Its latest raise implies that the fund will soon play a much more active role in supporting the development of cryptocurrency startups.

A decentralized farming protocol on the BNB and Gnosis chains, XION Finance, said in a statement that it secured a $50 million investment commitment from Bahamas-based GEM Digital Limited, a digital asset investment firm that claims to have invested in over 30 utility tokens globally.

The company plans to use the funds to provide “everyday users with the ability to earn high yields, swap assets between multiple chains and the opportunity to invest into tier one projects,” Ronan Quarmby, founder of XION Finance and CEO of XION Global said in the statement.

GEM Digital has also committed $25 million in funding to Geeq, a multi-blockchain platform that uses a patent-pending blockchain consensus mechanism.

“With the GEM capital commitment, we are ready to bring enterprise and individuals into the metaverse and Web3,” Ric Asselstine, CEO of Geeq said in a statement.

GEM Digital’s parent company GEM Capital claims it is “a $3.4 billion alternative investment group that manages a diverse set of investment vehicles focused on emerging markets across the world.”

Other venture rounds this week include:

  • EtherMail, a Web3 e-mail solution or anonymous and encrypted wallet-to-wallet communication, secured a $3 million seed raise, led by Fabric Ventures and Greenfield One
  • Blockchain data startup founded by a former Coinbase employee, Coherent, secured $4.5 million from Foundry Group
  • Play-to-earn startup Skrmiish raised a $2.5 million seed led by Launch Africa.
  • Bits, a spare change crypto investing app with a similar concept to Acorns, raised a $1.2 million pre-seed led by HOF Capital.
  • Estonian Blockchain analytics startup, Cookie3, secured a $2.5 million Seed round from The Spartan Group.

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Despite crypto gaming related projects and funds raising close to a billion dollars in November 2021, there have been only a handful of games that have attracted users apart from mercenary capital, and have had sustained activity for longer than a few months. Crypto gaming is going through an infrastructure phase. Theoretically, crypto gaming stands to benefit from purpose-built, high throughput chains, where blockspace is cheap (especially for games which are fully onchain). However, despite the launch of many gaming-focused chains, most crypto games are lacking in quality and quantity. Most new crypto gaming infrastructure either have no games or only a few games launched (e.g. Xai) or have failed to garner meaningful attention (e.g. Immutable X).

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