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Europe’s most active early-stage gaming investors

Which funds are fuelling Europe’s budding gaming industry?

By Tim Smith in Barcelona

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The video games industry has historically been dominated by two countries — the US and Japan — who lead the world when it comes to making games consoles and the titles people play on them. But times are changing, and Europe is now beginning to play a leading role in the modern games industry.

Mobile gaming represents one of the big shifts in the sector, and two of the category’s biggest titles — Candy Crush and Clash of Clans — come from European studios King and Supercell.

And as players have moved online, social gaming, streaming and esports have created whole new opportunities in social networking, video hosting and software products aimed at professional gamers. Again, some of the most popular online games of recent times come from Europe, including Viking survival game Valheim — a huge pandemic hit — and the inimitable Minecraft, which remains popular more than a decade after launching.

So as Europe begins to take its place at the global gaming table, who are the most active early-stage investors on the continent, powering the next generation of play?

We drew on data from Dealroom and spoke with some of Europe’s top early-stage investors to find out who’s been investing most over the past couple of years, and to find out what they’re interested in backing.

Velo Partners — London

Velo Partners founder Evan Hoff (left) and director Andrew Reader
Velo Partners founder Evan Hoff (left) and director Andrew Reader

Latest fund: Velo Partners is an open-ended fund backed by a family office, meaning the fund size isn’t capped or bound by a timeframe. The team tends to do ticket sizes of $500k-2.5m.

Focus: Velo Partners invests globally, with a preference for mobile casual games, social games and real money casino games. They say they’re also happy to look at “any business which can be supported by scalable and encouraging early-stage user-level KPIs”. 

Number of investments into European gaming startups in the last 24 months: 27

Gender split of investment team: Five men, one woman.

Notable investments: 

  • Moonactive — Tel Aviv-based mobile game developer with more than 100m downloads across multiple games. 
  • Tripledot — London-based mobile game developer specialising in puzzle games.
  • Candivore — Tel Aviv-based mobile game studio that developed Match Masters, a game with more than 10m downloads.

The pitch to founders: We have a deep understanding of the casual games market and metrics required to profitably scale a game. Velo’s portfolio is also not limited to the gaming industry, with a significant portion of our portfolio relating to the gambling industry where we have extensive advisory and operational experience, and can draw on our knowledge and experience from our gambling portfolio. We are also supportive investors and have the ability to continue to back our portfolio companies for multiple follow-on rounds”

Sisu Game Ventures — Helsinki

Screenshot from portfolio company Resolution Games’s title “Demeo”
Screenshot from portfolio company Resolution Games’s title “Demeo”

Latest fund: Sisu launched a $55m fund in October 2021 (writing initial cheques of $100k-2m).

Focus: While Sisu has a strong Nordic presence, the firm says it’s geography agnostic and largely focuses on free-to-play mobile games. Sisu’s core thesis revolves around building long-term relationships with serial entrepreneurs in the industry, and it tends to focus on gaming studios more than supporting tech or platforms.

Number of investments into European gaming startups in the last 24 months: 21

Gender split of investment team: All three partners are men, while the wider investment team includes one female venture partner.

Notable investments: 

  • Playco — Tokyo-based game studio that developed cult hit game “Heads Up”.
  • Resolution Games — Stockholm-based VR and AR game developer.
  • Next Games — Helsinki-based studio developing “franchise games” based on popular entertainment series.

The pitch to founders: “We built the fund we would’ve wanted to have when we founded studios. We understand the struggles of early-stage studios and are committed to offering candid advice and a sandbox environment for founders to try their most ambitious ideas without anyone getting in the way. 

“We’ve also incubated many studios, including Lightheart Entertainment and Mainframe Industries, so we can also be more hands on. We’re not the type of investor to breathe down anyone’s neck and generally do not take board seats. 

“Founded in 2014, we’re one of the oldest game funds and have done 70+ deals, so we can also call on an extensive network of founders, partners and other investors.”

London Venture Partners — London

Concept art from portfolio company Klang’s game SEED

Latest fund: London Venture Partners is deploying an $80m fund which was announced in 2019 (writing initial cheques of $500k-2.5m).

Focus: The fund’s main geographies are North America and Europe and it invests across PC, console, mobile and, lately, Web3 companies. 

London Venture Partners says it prefers genres that have the potential to reach a wide audience, that “tread the fine line between engagement and accessibility”. It also invests in gaming technology and platforms with “the potential to enable new gaming experiences”, or to gaming-related companies which also have use-cases outside of gaming.

Number of investments into European gaming startups in the last 24 months: Five new investments, and five follow-ons into portfolio companies.

Gender split of investment team: All male.

Notable investments: 

  • Supercell — the Helsinki based mobile studio behind Clash of Clans.
  • Unity — San Francisco-based game development software company.
  • Klang — Berlin-based game studio which recently raised a $41m Series C to build its ambitious online multiplayer game SEED.

The pitch to founders: “We’ve been games investors for over a decade, and have supported companies from their inception all the way to their eventual exit. 18 LVP alumni have either been acquired, like Supercell, or publicly listed, like Unity. We have one of the largest early-stage games portfolios in the world, and we look to leverage that community to give our founders the best chance of success. 

“We also know games. LVP is run by successful gaming company founders and operators that have direct experience in what the teams are facing, with over 60 years’ operating experience in the games industry. We feel this gives us an edge in both finding the right teams, and maximising their chances of success through the support we can provide.”

Cherry Ventures — Berlin

Latest fund: Cherry’s latest funds are its €300m fourth main fund and a €30m crypto fund, announced in January and February 2022 respectively. Ticket sizes are generally between €300k and €5m.

Focus: Cherry focuses on seed and pre-seed stage companies in Europe. It’s not a specialist gaming fund; it also invests across healthtech, fintech, ecommerce and climate tech.

Number of investments into European gaming startups in the last 24 months: Seven

Gender split of investment team: Of the four investment partners, three are male and one is female. In the wider investment team there are nine men and five women.

Notable investments: 

  • Hologate — Munich-based VR studio building immersive gaming experiences.
  • Soba — No-code software tools for building games, based in Berli.
  • GOALS — Stockholm-based studio that developed GOALS, a play-to-earn multiplayer football game.

The pitch to founders: “We’re led by founders and operators, drawing from our own experiences building companies like Zalando and Spotify. We’re a long-term partner, reserving 60% of our funds for follow-on rounds, and have a much higher rate of seed companies that then successfully raise a Series A than the average (the average is around 20%, for Cherry portfolio companies it is 80%).

“Our portfolio companies also get access to our network of strategic experts who can help with issues like finance, talent and comms”

Startuplab — Oslo

Startuplab investment partner Lise Fulland (L), investment manager Jens Christian Aune and head of investments Gisle Østereng (R)

Latest fund: Startuplab announced its latest €14.8m fund in August 2021, with ticket sizes of €100k-€300k.

Focus: Startuplab says it invests in “the most ambitious Norwegian technology founders”. The fund is sector agnostic and invests in both software and software-enabling hardware.

Number of investments into European gaming startups in the last 24 months: Five

Gender split of investment team: The fund has two partners, one male and one female.

Notable investments: 

  • Playfinity — Oslo-based startup developing gamification experiences around real-world sport.
  • Playpulse — Oslo-based startup developing exercise bikes with built in games.
  • BitPet — Oslo-based developer of AR virtual pet game.

The pitch to founders: “Startuplab is not only a venture investor; we are also one of the largest accelerators in the Nordics. Our core value is being founders first and our team of 20 people truly live and breathe this value. 

“Our LP base consists mainly of other successful tech entrepreneurs eager to pay it forward through their experience and network in addition to their capital. We have a strong network of investors in Norway and internationally, so the chance of you meeting your next investor through us is high. 

“Startuplab also has a corporate partnership programme with 28 of the country’s largest established corporations offering our startups exciting customer opportunities, innovation contracts and truly important feedback from the market. 

“We also work closely with academia and research, both to help commercialise important research but also for recruitment purposes.”

SMOK Ventures — Warsaw

SMOK Ventures managing partner Diana Koziarska (L) and founding partner Borys Musielak (R)

Latest fund: SMOK launched its first €10m fund in 2019 and is preparing its second fund, with bigger capacity, for this autumn. It’s hoping for ticket sizes of €100k-1m.

Focus: SMOK backs software and gaming companies at pre-seed and seed stage. In gaming, the fund focuses on backing studios, with an emphasis on long-term cooperation.

Number of investments into European gaming startups in the last 24 months: Four

Gender split of investment team: The firm has four partners, three male and one female.

Notable investments: 

  • Exit Plan Games — Warsaw-based game developer with a focus on fun, light-hearted games.
  • Return Entertainment — Espoo-based developer of games that are hosted on the cloud.
  • Gaminate — Warsaw-based startup selling energy supplements designed for gamers.

The pitch to founders: “Managing partner Paul Bragiel has deep gaming expertise and a global network in the industry, having founded a gaming studio, and being a shareholder in companies like Unity and Niantic. He’s advised or invested in more than 100 gaming companies, so he knows what he’s doing.”

Creandum — Stockholm

Latest fund: A $500m fund announced in March 2022, with ticket sizes of €500k-12m.

Focus: Creandum is sector agnostic and invests from pre-seed to Series A, either in European companies, or European founders working in the US.

Number of investments into European gaming startups in the last 24 months: Three

Gender split of investment team: Seven male partners, one female partner.

Notable investments: 

  • Kahoot! — Oslo-based edtech gaming scaleup.
  • Small Giant Games — Helsinki-based mobile game development studio.
  • Playraven — Helsinki-based mobile game development studio with a focus on multiplayer.

The pitch to founders: “We’re one of the EU’s best performing VCs with a strong portfolio — one in six of our companies is a unicorn. We’re also a long-term partner and back companies with a 10+ year timeframe and help through the ups and downs.

“We’re an international team with four offices in three of Europe’s main startup hubs (London, Berlin, Stockholm) and one in San Francisco to support European founders looking to tackle the US market.”

Another of Europe’s early-stage gaming investors that has been most active in the past 24 months, according to Dealroom, is Initial Capital, but the fund did not respond to Sifted’s request for more information on its investments.

Tim Smith is Sifted’s Iberia correspondent. He tweets from @timmpsmith 

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