Gaming-focused Play Ventures to launch second fund in Q4 this year

Henric Suuronen, Founding Partner, Play Ventures.

Singapore’s gaming-focused venture capital firm Play Ventures is on track to launch its second fund in the fourth quarter of this calendar year.

According to an industry source (who is not related to the company), the firm is aiming to raise about $80-100 million for the second vehicle. But Play Ventures founding partner Henric Suuronen declined to comment on the development.

However, Suuronen shared that the VC firm has received keen interest from its existing limited partners (LPs) to re-invest after seeing the performance of its $40 million debut fund, which was closed in August last year.

Play Ventures’s debut fund was backed by several gaming industry heavyweights including Rovio, the maker of Angry Birds; Modern Times Group, an international esports and gaming entertainment company; and Anton Gauffin, CEO of social gaming giant Huuuge Games. Other LPs include VCs and family offices from Asia, the US and Europe.

To date, Play Ventures has invested in 22 early-stage companies with another 2-3 more investments in its pipeline this year. Its portfolio includes Vietnam’s Gamejam, Singapore’s Potato Play and Finnish-Icelandic firm Mainframe Industries. It also comprises a mix of game studios producing free-to-play titles and B2B gaming services firms across Europe, the US and Asia.

Exits for gaming startups

The gaming sector is seeing a surge of interest as investors flock to post-COVID opportunities.

In US public markets, gaming-related ETFs have so far outperformed the market. As of 8 July, ETFs like VanEck’s Gaming and Esports ETF (ESPO) have risen by over 43 per cent while ETFMG Video Game Tech ETF (GAMR) is up over 36 per cent year-to-date, compared to a dip of over 8 per cent and 2 per cent for the Dow and S&P 500 respectively.

Several private market deals were also announced this year, the most prominent being Zynga’s $1.8-billion acquisition of Istanbul-based game studio Peak just last month. Suuronen shared that there’s still room in the market for more M&A activity which will likely be fuelled by the likes of cash-rich firms such as Tencent Holdings and Activision Blizzard.

“I expect at least 1-2 more billion-dollar deals to be announced this year. Once most of these big gaming companies hit a certain size, they have to do M&A to acquire customers and drive scale,” explained Suuronen.

“It is hard to tell whether this public exuberance is going to sustain through the year, but it still does not take away the IPO potential of gaming companies. The unicorn ratio in the gaming sector is very high. About one-third of unicorns in Europe are from the gaming sector alone. That speaks a lot about the growth potential of this market,” he added.

The gaming difference

Suuronen added that gaming companies also typically have shorter monetisation and exit timeframes, compared to more crowded segments such as B2C marketplaces or ride-hailing. Play’s own portfolio companies already secure over $20 million in revenues on average, with a number of them like Vietnam’s Gamejam already hitting profitability.

“Most gaming startups usually require just about 2-3 rounds of funding before exiting. This also means less dilution for shareholders. The time it takes for companies to exit can range anywhere from 3-10 years, depending on the size of the company and the scale of its ambitions,” shared Suuronen.

Few VCs, however, have yet to fully jump into gaming investments, making Play Ventures one of the few globally that focuses solely on the sector. The firm, however, has noted rising VC interest in the space and co-invests frequently with others such as Initial Capital, Makers Fund, Galaxy Digital and Korea Investment Partners (KIP). Some have also begun exploring follow-on rounds as well, such as Andreesen Horowitz’s participation in Mainframe Industries’s $8.3 million round in March this year.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.