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Vgames raised $142 million for its third fund to continue investing in talented gaming teams around the world.
Led by Eitan Reisel and Daniel Mironov, the fund (which spells its name Vgames) will invest in game studios at different stages, backing talented founders and supporting them as they grow.
“The third fund is very exciting, as it was just an idea five years ago,” CEO Reisel said in an interview with GamesBeat.
Previous funding was $60 million in 2020 and $141 million in 2021.
“We are proud to be among the leading investors in games globally. Privileged to support talented founders from the early days to the later stages. Vgames has led investments in early-stage companies and has also led mega rounds in some of its portfolios,” Reisel said.
Since Vgames launched in March 2020, the fund has invested in 38 companies globally, making it one of the most active gaming funds in the world. It also invested in “gamification” agreements.
“We’re at the top of the performance charts,” Reisel said.
Notable investments include InnPlay Labs (acquired by Playtika for up to $300 million), SuperPlay (acquired by Playtika for up to $1.95 billion), 1047 Games, Candivore (top ten grossing Match 3 games globally) , GOAT (former founders of Plarium), Elyzio, 44 Pixels and AMP among others. The output figures have been in the billions of dollars.
“From day one, our goal was to be a very founder-focused fund. I think the more support our founders have, the better we will be,” Reisel said. “I am very confident in the model we have built and am proud to support the best global entrepreneurs from Israel, the Middle East, Europe, the US and upcoming additional parts of the world. Our founders are our success,” said Reisel.
Vgames is proud to be a specialist investment team consisting of Mironov; Reisel; David Digmi, director of operations; and Riki Papa Pnini, public relations and marketing leader.
“We’re still very consumer-focused,” Reisel said. “Content creation, mostly in game studios. It is very similar in strategy to finance one and finance two. “We’re happy with it, so why change?”
All team members have active roles in investments and portfolio. This intimate and hands-on team allows the fund to execute decisions quickly while maintaining a relationship of trust between investors and entrepreneurs. The fund is also stage agnostic, investing from the company’s early days through A and growth rounds.
Reisel said that cross-platform gaming has arrived in a big way and that it works well for games to be released on multiple platforms, including PC, consoles and mobile devices.
When asked about investments in blockchain gaming, the metaverse or artificial intelligence, Reisel said the company does not believe in those trends. Think of cryptocurrencies as a place to exchange, rather than a place to play.
“I think it was too aggressive in how it landed on the market. We will still see these intersections, but I think it will take time. As a fund, we took very, very few positions,” Reisel said. “You won’t see any major crypto names on our list. We are very disciplined in creating content. I think it’s not technology. It’s more the type of content you’re playing. “We always want to invest in games that we think can appeal to a mass market.”
Reisel said he doesn’t think AI will replace game creators anytime soon. He sees great value in casual and mid-core games, art, narrative design, and level design when it comes to human capabilities. But he does believe that AI will help reduce production costs.
“Maybe if you need to put 10 trees on a map, you could do it with AI,” he said.
The fund recently led an undisclosed $50 million round in one of its portfolio companies. Among the support offered by the fund is non-dilutive financing for growing companies as an alternative to equity capital, in which everyone wins for both founders and investors.
“We invest in equipment, content and believe in a data-driven approach,” said Mironov, partner and gaming expert at Vgames, in a statement. “Depending on the stage of the company, we analyze the gender, metrics if applicable, and growth opportunity, and based on that we drive our investment decisions. We’re looking for the strongest teams out there, teams that aren’t afraid to think big and seize the opportunities of the red ocean. We are often asked if we invest in mobiles/PCs/consoles.”
Mironov added: “Our response has been consistent: we have a content-first approach. So as long as players enjoy playing, as long as there is a solid business model behind it and there is great potential, we would love to explore.”
Vgames intends to maintain the same pace of investment and rapidly deploy capital to grow its portfolio and also support its existing portfolio.
Among investments, Reisel is bullish on 1047 Games and its pending May release of Splitgate 2. Reisel said he sees companies like 1047 Games benefiting from remote work.
Vgames hopes to hire its first investor outside of Israel, although the fund has been a global investor with companies in Europe, India, Türkiye and the Middle East.
“We are here to deploy if we find opportunities that we can move forward,” Reisel said.
There were times when the company made an investment every month, he said. He said he hopes the situation in Israel will improve.
“I live in Israel,” he said. “I have to be optimistic.”
And he said he’s optimistic that people will continue to play.
“The number of people worldwide only grows. Connectivity is growing. I think the fact that today’s games can run on low-end devices in tier three countries is very important,” Reisel said. “We focus a lot on that with our portfolio companies,” he said. “The games can be accessed from any device. “We are seeing a lot of innovation in companies and intellectual property owners will continue to be at the helm for many years to come.”
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