2 - 4 minute read
Gaming-focused venture capital firm Bitkraft recently raised $220.6 million for its second “token fund” after raising $75 million in committed capital through a previous fund that invested in blockchain gaming and digital entertainment. Bitkraft was founded in 2016 by gaming and esports veteran Jens Hilgers and focuses on seed through series B investments in game studios, gaming platforms, and game-related technology across both Web2 and Web3.
Bitkraft has grown to approximately $125 million in assets under management, with one-third devoted to Web3 opportunities. The firm’s funds have included an esports-focused and a general venture capital fund, as well as two “token” funds. Carlos Pereira, a partner at the firm, emphasized that they were gaming investors with an operating and investing background that precedes the Web3 gaming bull run.
The team’s experience as gamers motivated Bitkraft’s move into gaming rather than a desire to get in on the GameFi boom that hit in 2021 as play-to-earn titles like Axie Infinity made numerous headlines and dollars. Bitkraft favors developers with higher-than-average experience, often gained through decades of experience at Web2 studios. The firm’s recent investments have included Eve Online developer CCP Games and blockchain-enabled mobile game developer Jungle.
Combination of Equity and Token Purchases
Bitkraft often invests through a combination of equity and token purchases, aiming to maximize value creation through primary and secondary sales. To do this, Pereira says, they must “figure out a business model that works and allocate that value between equity and tokens.”
The bull market of 2021 attracted new game developers to the Web3 space, who received venture capital backing through the first half of 2022. Despite the bear market that followed, that narrative hasn’t finished playing out yet. Those developers are still in the early stages of their two- to four-year development cycles, Pereira noted.
What This Means for Traders
Bitkraft’s success in raising a substantial amount of capital for its second “token fund” suggests that there is significant interest in the gaming sector, particularly in the blockchain space. As such, investors should keep a close eye on emerging trends and developments in the gaming industry as it continues to gain momentum. With the early stages of development cycles underway, traders should be prepared for the potential growth and shifting market trends in the sector.
