Gaming VC Firm Konvoy Ventures Raises $150 Million

(Bloomberg) — The cryptocurrency industry is in crisis, but investors like Konvoy Ventures still see potential. The gaming-focused VC firm has raised $150 million for a new fund, which it will announce Wednesday. It aims to spend about 20% to 30% of that money on blockchain and crypto-related games.

Founded in 2018 by brothers Josh and Jason Chapman and their childhood friend Jackson Vaughan, Konvoy Ventures has already invested heavily in blockchain technology. The Denver-based company backed Sky Mavis, the developer of Axie Infinity, a virtual world where players breed and battle monsters tethered to non-replaceable tokens — one of the best-known blockchain games and one of the most controversial. The company also invested in Genopets, a game where players can grow and evolve an NFT pet through real-world physical exercise, and Ready Player Me, a platform for designing virtual avatars that can wear NFTs.

The use of blockchain and NFTs in gaming has been criticized. Some players argue that these elements do not enhance their experience and are simply another way for gambling companies to make a profit. A $620 million hack in March also affected a blockchain network used by Axie Infinity, raising questions about the security of these games and whether the VCs that support them should be needed to save them.

Jason Chapman, managing partner at Konvoy Ventures, declined to comment on whether his company had participated in a $150 million funding round to help Sky Mavis pay back players. But he said in an interview that the company was willing to help its portfolio companies weather a tougher market environment.

“We are delighted to support them through thick and thin,” he said.

His brother Josh said the company will consider making token-based investments rather than seeking shares. And beyond crypto, he said the company will continue to support more quintessential gaming startups — including those that develop gaming infrastructure and intersect with industries such as fashion, healthcare and education.

“One hundred percent exposure to crypto would not be the right strategy for us, but 0% would also be the wrong strategy,” said Josh Chapman in an interview.

The brothers argued that while changes in the game world often trigger pushback, blockchain has the potential to improve players’ experiences, including potentially allowing them to earn money while playing.

“This is just going to be another technology that most people are going to use in games,” said Jason Chapman.

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