Gaming VC Konvoy Launches Second Quarter Report on the State of Gaming and Venture Capital as Consumer Demand Continues to Grow
Konvoy’s Second Quarter Report on the state of gaming and venture capital shows the gaming market size up 2.9% year-over-year despite deal flow and funding down among volatile market conditions
DENVER – July 22, 2024 – Konvoy, a venture capital firm investing at the forefront of platforms and technologies in gaming, today launched its quarterly report for the second quarter of 2024. The report examines the state of the gaming and venture capital (VC) industries, seeking to highlight and contextualize the emerging trends across private and public markets, deal flow and volume, industry growth and trend analysis both in current time and compared to previous quarters.
“While our Q2 report showcases a parallel result to the ongoing volatile environment across venture with funding and deal volume down, we know this is a sector that will continue to grow with the gaming market size already up 2.9% year-over-year,” said Josh Chapman, co-founder and managing partner at Konvoy. “We’re optimistic about the growth of our current portfolio and for the future investment opportunities in gaming innovation.”
Second Quarter Report Takeaways:
The gaming market reflects the larger macro environment
The second quarter of 2024 revealed similar conditions to the larger trends across venture, with gaming funding down 20% quarter-over-quarter and deal volume down 22% quarter-over-quarter. Despite lagging growth and late-stage deal activity, early-stage funding continues to surge back, with the second quarter seeing the highest early-stage deal funding since the fourth quarter of 2020 – 90% or more of funding has been invested in early-stage deals since the fourth quarter of 2022. The gaming market is also showing indicators of becoming more sustainable, with 22% of deals making up 80% of disclosed deal funding in comparison to 12-13% of deals comprising the same percentage of funding in 2021. This indicates that the gap between large and small to midsize deals is lessening, spreading capital more evenly across the sector as a whole.
The growing consumer demand
Despite tougher fundraising conditions, the consumer gaming market continues to grow, as this quarterly report reveals that it’s set to reach $189.3b in 2024, up 2.9% year-over-year. Gaming also continues to perform well in the public markets, with the ESPO up 19.7% year-to-date in comparison to the S&P 500 up 15.1%. These indicators suggest a proven demand for gaming and opportunities for growth and investment in the space, especially once volatile conditions and interest rates cool. This is reinforced by the continued advances made into gaming from entertainment and social media giants like YouTube and LinkedIn in addition to Voodoo’s recent acquisition of BeReal.
To download the full report, click here.
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About Konvoy:
Headquartered in Denver, CO, Konvoy’s portfolio spans 50+ investments across the globe, making it a point to continue investing with a global mandate – including their position as one of the first funds to invest in gaming startups across Africa, such as Carry1st. With $258m AUM, the firm is actively deploying funds from its $150m Fund III, with a specific focus on pre-seed, seed, and Series A gaming companies. Most recently, they contributed heavily to the Series A round of investing (following A16Z’s lead) in k-ID, a safety and compliance technology platform for games. Other notable portfolio companies include Pok Pok, Solsten, Axie Infinity (Sky Mavis) and more.
