Video game makers attracted $1.1 billion in venture capital funding across 110 deals in the second quarter of 2022, representing an average deal value of $10 million, according to the latest report by Pitchbook. This represents a 12.1% quarter-on-quarter increase in deal value, which stood at $1 billion in Q1, and a 29% quarter-on-quarter decrease in deal volume, which stood at 155 in Q1.
Both metrics saw significant year-on-year declines, with deal value falling 80% and deal volume declining by 57.5%.
Despite the decline, there were several notable VC deals struck during the quarter. Among these were cloud provider Coreweave, which raised $421 million in a Series B round, and in-game advertising platform Anzu, which raised $48 in a Series B.
Startup Triumph Labs, which allows game developers to institute real-money tournaments in their mobile games via its proprietary SDK and engine, is identified as a particular success. The company raised $10.2 million in its most recent Series A funding round, bringing the total raised to $14 million and the company valuation to $51.2 million. Pitchbook estimates a 92% probability of success upon its exit.
Venturing forth
Late-stage deals proved particularly popular in terms of deal value, accounting for $611 million – 55% of the total. This marks the first quarter since Q1 2022 where late-stage deals outperformed other categories. However, other categories saw stronger performance in terms of volume, with early-stage, angel, and seed deals accounting for a combined 71.8% of VC deals. The report notes that “this amount of activity in early-stage startups underscores investor optimism for the industry’s long-term growth potential.”
North America has outperformed other regions throughout the first six months of 2023, with $1.3 billion in combined activity, compared to $400 million in Asian and $300 million in Europe.
Earlier this month, DDM Agency examined the state of investments and M&A activity in Q1 2023.
