Vgames raises $142M for its third fund for gaming

Vgames raised $142 million for its third fund to continue investing in talented gaming teams across the world.

Led by Eitan Reisel and Daniel Mironov, the fund (which spells its name Vgames) will invest in game studios across different stages, backing talented founders and supporting them as they grow. 

“The third fund super exciting, as this was only an idea five years ago,” said Reisel, managing director, in an interview with GamesBeat.

The previous funds were $60 million in 2020 and $141 million in 2021.

“We are proud to be among the leading investors in gaming globally. Privileged to back talented founders from early days to later stages. Vgames has led early stage investments in companies while also leading mega rounds in some of its portfolio” said Reisel.

Since the launch of Vgames back in March 2020, the fund has invested in 38 companies globally, making it one of the most active game funds in the world. It also invested in “gamification” deals.

“We are on top of the charts in performance,” 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 exit numbers have been in the billions of dollars.

“From Day One we aimed to be a very founder-centric fund. My belief is that the more support our founders have, the better we are,” said Reisel. “I am very confident in the model we have built and proud to be backing top entrepreneurs globally from, Israel, Middle East, Europe, US, and soon-to-be additional parts of the globe. Our founders are our success,” said Reisel. 

Vgames prides itself on being a specialized investment team comprising Mironov; Reisel; David Digmi, COO; and Riki Papa Pnini, IR and marketing lead.

“We are still very consumer focused,” Reisel said. “Content creation, with the majority in game studios. It’s very similar in strategy to fund one and fund two. We’re happy with it so why change?”

All team members have active roles in investments and portfolio. This intimate, hands-on team enables the fund to quickly execute decisions while maintaining a trusting investor-entrepreneur relationship. The fund is also stage agnostic, it invests in very early days of the company all the way to A and growth rounds.

Reisel said that cross-platform games have arrived in a big way, and it works well for games to launch on multiple platforms, including PC, console and mobile.

Asked about investments in blockchain games or the metaverse or AI, Reisel said the firm doesn’t believe in those trends. He thinks of crypto as a trading place, rather than a place to play games.

“I think it was too aggressive on how it landed on the market. We’re still going to see these intersections, but I think it’s going to take time. As a fund, we took very, very few positions,” Reisel said. “You won’t see any big crypto names on our list. We’re very disciplined on content creation. I think it’s not technology. It’s more type of content you’re playing. We always want to invest in games that we believe can attract a mass market.”

Reisel said he does not think that AI is going to replace game makers 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 AI will help on lowering production costs.

“Maybe if you need to put 10 trees on a map, you could do them with AI,” he said.

The fund has recently led an undisclosed $50 million round in one of its portfolio companies. Among the support the fund provides is nondilutive financing for growth companies as an alternative to equity – win win for both founders and investors. 

“We invest in teams, content and believe in a data-driven approach,” said Mironov, partner and game expert at Vgames, in a statement. “Depending on the stage of the company we analyze the genre, metrics if applicable and growth opportunity, and based on that drive our investment decisions. We are seeking for the strongest teams out there, teams that are not afraid to think big and tackle red ocean opportunities. We often get asked whether we invest in Mobile/PC/Consoles.”

Mironov added, “Our answer has been consistent: We have a content-first approach. So, as long as players enjoy playing, as long as there is a strong business model to back it and as long as there’s great potential, we would love to explore.”

Vgames is intent on keeping the same investment rhythm and deploying capital quickly to grow its portfolio and support its existing portfolio as well.

Among the investments, Reisel is optimistic about 1047 Games’ and its pending launching in May of Splitgate 2. Reisel said he sees companies like 1047 Games benefiting from remote work.

Vgames expects to hire its first investor outside of Israel, though the fund has been a global investor with companies across Europe, India, Turkey and the Middle East.

“We’re here to deploy if we find opportunities we can move on,” Reisel said.

There were times when the firm made an investment every month, he said. He said he hopes the situation in Israel is going to get better.

“I live in Israel,” he said. “I have to be optimistic.”

And he said he is optimistic that people will continue to play games.

“The amount of people globally is only growing. Connectivity is growing. I think the fact that games today could run on lower-end devices in tier three countries — it’s very important,” Reisel said. “We focus on that a lot with our portfolio companies,” he said. “Games can be accessible on any device. We’re seeing a lot of innovation in companies, and IP holders are still going to run the show for many years.”