The world of gaming has undergone some exciting changes in the last few years. With the rise of blockchain and cryptocurrency, the gaming industry has been revolutionized as developers explore ways to maximize game value and create an open economy. Powering this gaming revolution is venture capital firm Bitkraft, following the launch of its second “token fund” in March 2021. This time, the firm has raised $220.6 million of its total $240 million target, according to a filing with the U.S. Securities and Exchange Commission (SEC).
Founded by gaming and esports veteran Jens Hilgers in 2016, Bitkraft is dedicated to investing in game studios, gaming platforms, and game-related technology — both through conventional (Web2) and cryptocurrency (Web3) avenues. Bitkraft has already grown to approximately $600 million in assets under management, a third of which is devoted to Web3 opportunities. This is evidenced by the fact that since the first fundraiser in 2021, two other funds have been added: an esports-focused fund and a general venture capital fund.
Bitkraft’s Partner, Carlos Pereira, explains that the firm views itself as gamers rather than a firm looking to get in on any GameFi boom that may have arisen in 2021. The team prefers working with developers with a wealth of experience as seen from their many decades spent at Web2 studios. Recent investments have included representatives from the Web2 and Web3 sphere, such as Eve Online developer CCP Games and blockchain-enabled mobile game developer Jungle.
Jungle has since closed a $6 million funding round co-led by Bitkraft Ventures and Framework Ventures, with a group of investors also participating. The aim is to accelerate the development of its first game title, an NFT mobile shooter, as well as to expand the team. Rather than starting from scratch, Jungle seeks to acquire existing intellectual property rights from other video game properties and adapt them into web3 mobile games, with CEO Joao Beraldo citing the need to “create games where players come for the product experience and stay for the open economy.”
Beraldo believes web3 gaming is the only viable way for the industry to reach mass adoption, as it has the potential to create hybrid games that are both mobile-first and blockchain-enabled. He also highlights the competitiveness of the video game industry, where poor timing can affect market penetration of otherwise quality games. Bitkraft’s Carlos Pereira is confident in Jungle’s ability to utilize underutilized IP, allowing it to quickly deploy and adapt in this “fast-growing ecosystem.”
The bullish market of 2021 intended to attract new game developers to the Web3 space, and that goal is still being carried out as those developers move through their two- to four-year development cycles. Bitkraft’s hybrid approach to mixing equity and token purchases when investing in gaming allows them to maximize value creation through primary and secondary sales, resulting in increased gameplay options as well as profits.
This has been enabled by Bitkraft raising $220.6 million for their second token fund, an impressive feat considering their first fund only managed to raise $75 million. With Bitkraft at the helm and their approach to underwriting great games powered by Web3, the gaming revolution looks set to blaze new trails. And with the additional funds, this revolution may even reach the mass adoption Jungle is aiming for.
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