Usually, when we think of Israeli startups and innovation our minds tend to float towards AI, cyber, blockchain, mobility tech, and others. However, a new VC fund has its sight set on one industry from the land of milk and honey: Gaming. The industry is on a fast-paced rise to the top as it already brings in more revenue than both the music and entertainment industries, and has caught the eye of Andreessen Horowitz, one of the leading VCs from around the world. Now, finally, with Viola Ventures among investors, a new Israeli fund is trying to get in on the gaming action.
Israel will make up half of the portfolio
The new fund, VGames, is the first Israeli VC fund focused on the gaming sector, and it seems as if the right personnel is behind the wheel, as former Head of Gaming at Google Israel, Eitan Reisel leads the way. The fund has reported that it has already secured $30 million with intentions to invest in early-stage projects. Reisel tells Geektime that VGames is a global fund, that will focus mostly on Israel and Eastern Europe. Yet, out of the 4 companies already receiving investments, one is located in the U.S. “I believe that Israel will make up half of the portfolio,” notes Reisel, who also claims to play many of the games developed by companies the fund invests in.
It looks like VGames intends to invest mostly in content for games rather than the technology surrounding the industry: “We invest in gaming companies - anything that’s part of the genre. We search more for the game developers, less for the technology around the industry… We are very open to different game genres, as long as they have the potential to reach millions who can enjoy the content,” explains Reisel, who also clarifies that the fund will not invest in casino or gambling games. Reisel further reveals that the new fund will invest anywhere from $250,000 to $2 million, depending on the stage of game development.
It’s no secret that the Israeli game industry has seen quite a growth spurt in recent years, although mostly in the casual gaming market. Reisel also agrees that Israel still doesn’t produce games with thorough content and production, but he also claims that it’s kind of the chicken or the egg syndrome: “we can agree that there is local talent but it also depends on funding that talent. I want to invest in companies that are part of less popular genres,” further adding that “with funding, connections to top gamers and a little patience, “a generation of AAA games won’t look like a pipe dream.”