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Tuesday, December 06, 2022

Griffin Gaming Partners Closes $750M Venture Fund

Santa Monica-headquartered venture capital firm Griffin Gaming Partners (GGP) has closed a $750 million fund, its second, to invest in the gaming space.

The company said that the fund was oversubscribed, meaning there was more money offered than targeted, and that it now has more than $1 billion in assets under management (AUM). The firm, founded by managing directors Peter Levin, Phil Sanderson and Nick Tuosto, who are avid gamers and have long track records in operating, investing and advising in the gaming sector, had launched its $235 million first fund in 2020 and has also used special purpose vehicles.

Levin tells The Hollywood Reporter that the new fund will allow for “more investing and investing with larger check sizes and at a variety of different stages.”

Griffin invests in content, software infrastructure and social platform companies in gaming, as well as gaming-related Web3 firms, meaning companies that center around blockchain technology. Among others, Griffin has invested in mobile gaming firm Spyke Games, Discord, which provides messaging and communications programs for gamers, Overwolf, a platform for creating, sharing and monetizing in-game apps and modifications, blockchain and NFTs platform Forte, transmedia studio Neon , Danish mobile game developer Tactile Games and Indian social gaming app company WinZO. M&A advisory firm LionTree serves as a strategic partner to Griffin’s Fund II.

Levin used to be CEO of Nerdist Industries and then served as president of interactive ventures, games and digital strategy at Lionsgate. Former investment banker Sanderson previously also invested in such firms as Telltale Games. Tuosto previously served as an advisor to Tencent in its acquisition of Clash of Clans maker Supercell and FoxNext in its sale by Walt Disney to Scopely.

“Griffin Gaming Partners aims to unlock value and growth for our portfolio companies as informed advisors and connectors,” said Levin. “With over $1 billion of assets under management, we have extensive relationships, honed perspectives and the creative instincts to uncover hidden gems, find synergistic partnerships and structure complex deals that impact the gaming ecosystem.”

Convergence is a key theme for Griffin Gaming Partners. “The lines have blurred across gaming, media, sports and social connectivity,” said Sanderson. “By seeing more than 1,300 qualified investment opportunities a year, we get a bird’s eye view into the industry and what it will take to succeed in the next phase of interactive entertainment across platforms, genres and demographics.”

The GGP team also highlighted that growth has made gaming the “dominant form of media.” The gaming market is now “larger than movies, music and books combined, and is the fastest-growing consumer trend globally, with 248 percent expected growth over the next decade,” according to research firm Newzoo, the firm noted. It also pointed out Newzoo data that one-third of the world’s population, or 3.1 billion people, play games almost an hour a day and that the global gaming market is projected to reach $256 billion of annual consumer spending in 2025, per analytics firm App Annie.

GGP says it makes “complementary investments across the gaming ecosystem … focusing on proven teams with experience scaling businesses.”

Explained GGP and LionTree managing director Tuosto: “Our thesis is simply that, with our dedicated focus and analytical capabilities, we can make sense of enormous quantities of data and see around corners. That informs our assessment of risk-reward, but also enables us to go to work for our portfolio companies through business development and aligned advice on navigating these highly dynamic market conditions.”

Top executives at GGP portfolio companies also laud the benefits not only of the firm’s investments, but also its advice and network of relationships. “Griffin understands our business and knows everyone in gaming,” said Spyke Games CEO Rina Onur Sirinoglu. “They understand what we need and why and open doors in days that would take us months.” WinZO co-founder Saumya Singh Rathore added: “Their ability to help us go after choice intellectual properties for a platform like ours is unique in the industry when the worlds of gaming and other forms of media are colliding.” And Overwolf co-founder and CEO Uri Marchand said: “The team has uniquely supported our growth by activating key commercial relationships and helped us bring on pivotal strategic investors through their network.”

With consolidation in gaming putting a spotlight on the sector and more companies looking at the gamification of their businesses, some see gaming as a red-hot space, including for entertainment players. “We’re at a turning point in gaming, with characters and storylines starting to make a huge splash in mainstream Hollywood,” GGP fund and portfolio company advisor, gamer and actress Felicia Day tells THR, “Because of Griffin’s investment in gaming companies, new stories will be created that will benefit every aspect of the entertainment space.”

And she added: “Gaming is clannish, and bridging the gap between being trusted and authentic in the gaming space and being an investor isn’t easy. Griffin’s genuine enthusiasm and passion for geek, nerd and gaming culture, combined with their experience in Hollywood and business acumen, makes me enthusiastic that the crossover will become even more frequent.”

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