Venture Capital Funds Redirected to Web 3.0, Gaming Startups in Drought Times

Leading the pack is Andreessen Horowitz (A16Z) who just announced two new funds – a massive $4.5 billion fund for Crypto and Blockchain businesses and Web3.0 startups

New Delhi: As venture capital (VC) funds and mainstream investors are squeezing the flow of money to traditional startups due to multiple global macro conditions, they have now turned their attention to emerging technologies like Web3.0 (Blockchain/ Crypto/NFT) and games (Metaverse) where they see immense opportunities.

Realizing that “funding winter” has finally set in after a strong recovery lasting more than two years in the pandemic that allowed internet-focused startups to grow exponentially across the spectrum – edtech, healthtech, grocery in online, food delivery and online home services, they decided to put their money elsewhere.

Leading the pack is California-based investment firm Andreessen Horowitz (A16Z) which just announced two new funds – a massive $4.5 billion fund for crypto and Blockchain businesses and Web3.0 startups and a $600 million ‘Games Fund One’ which focuses exclusively on the gaming industry.

About Web 3.0

Web3, or Web 3.0, represents the next generation of the Internet.

A group of former executives from one of the biggest cryptocurrency exchanges Binance have also reportedly set up a $100 million venture capital fund.

“Games will play a central role in defining the way we socialize, play and work in the next century, said Andreessen Horowitz.

The fund’s backers include co-founders from gaming companies like King, Discord, Roblox, Zynga, Twitch, Blizzard, and Riot Games.

Indian gaming industry startups have also realized immense opportunities as smartphone usage increases and data plans become cheaper, high-intensity gaming devices and larger screens arrive on the scene.

Mobile gamers in India

India is currently home to over 430 million mobile gamers and this number is expected to reach 650 million by 2025. Currently, mobile gaming dominates the industry, contributing over 90% of the current gaming market of 1.6 billion. dollars in the country, according to a latest report by the Internet and Mobile Association of India (IAMAI).

“The Indian gaming ecosystem consists of gamers of all ages, game developers and designers, investors and marketers all working together to deliver the latest cutting-edge games, concepts and offerings for gamers,” Sean (Hyunil) Sohn, head of Krafton, Inc’s Indian division, told IANS.

Gaming startups in India attracted $1.6 billion in the first nine months of 2021, according to a report by investment banking platform Maple Capital Advisors.

Almost 90% of the investment went to two big players in the fantasy sports and platform games industry – Dream Sports and the Mobile Premier League (MPL).

Huge investments in gaming startups

Top venture capitalists have also invested millions of dollars in other gaming startups like PlayShifu, Zupee, and Winzo. PUBG Mobile developer Krafton has invested $22.4 million in local esports company Nodwin Gaming.

“Over the past 12 years, we’ve had to update our GPUs (graphics processing units) more than 700 times, that’s consumer demand,” said Rajen Vagadia, vice president and president of Qualcomm.

A metaverse and NFT-focused startup known as Sandbox recently raised nearly $93 million in a round led by SoftBank Vision Fund 2, the first investment in crypto assets by the Japanese technology giant. investment.

Another NFT-focused startup, known as Sfermion, received $100 million from billionaires Cameron and Tyler Winklevoss (Winklevoss twins) and two general partners of A16Z.

Indian blockchain-based startups also aspire to be on the world map.

Cryptotech industry in India

According to Nasscom, the cryptotech industry in India has grown by more than 39% over the past five years. The government has also stated that there will be no blanket ban on all Blockchain or Web3.0 related technologies.

Apart from having a robust blockchain space, India’s tech and entrepreneurship sectors have also seen significant growth with over 230 cryptotech startups and 34 Indian companies achieving unicorn status in 2021 itself, according to Venture Intelligence. Unicorn Tracker.

Apart from popular crypto exchanges like WazirX, CoinDCX, and CoinSwitch Kuber, India is now teeming with Web3.0 startups like Polygon.

Rajan Anandan, managing director of Sequoia Capital, recently said that India has great potential in Web3.0.

“Look at the Indian startups in the Web3.0 space. Some of them are doing a great job, and not just in the crypto space. Startups working on Blockchain-based Web3.0 projects in India have continued to grow “, Anandan said at the Lenovo Tech World India conference in March.

As capital becomes scarce, Sequoia Capital has also asked its community of founders to tighten their belts and focus on profitability.

“We’re only just beginning to see how the rising cost of money affects the real economy. If you step back and think twice, it’s not just you. The belt-tightening and re-evaluating priorities will have second- and third-order effects, because one company’s costs represent someone else’s revenue or purchasing power,” the leading venture capital fund told its community. of founders.

Sequoia Capital India has invested in nearly 30 unicorns out of India’s 100 unicorns.

In the midst of funding winter, Blockchain/NFT, gaming, and Metaverse startups can breathe a sigh of relief for the time being.

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