The rise of gaming and cryptocurrency has created a new area for many specialized VCs to focus on, and a new venture fund seeks to tap into these burgeoning markets.
Newly launched Patron recently closed its first fund at $90 million, which was raised entirely through Zoom. It will invest in companies in what the firm calls the “spectrum of play.” Patron wants to lead or co-lead in the seed to very early stages of a company.
Founders Brian Cho and Jason Yeh previously worked at Riot Games, developers of the popular titles League of Legends and Valorant, and decided to start their own fund to take advantage of the growing gaming landscape.
Cho, co-founder and general partner at Patron, said they both felt the need to plug a gap in the market.
“We came together because we felt this need in the market as it relates to founders that are trying to build at the intersection of gaming, crypto and consumer,” Cho said. “There’s a lot of capital out there that’s deploying into different areas, but there really isn’t a fund that intersects in the conversations we see today.”
He added that Patron believes gaming and crypto could be the way into Web 3.0.
Patron counts among its LPs several from Andreessen Horowitz and the a16z Crypto fund, including Chris Dixon, Arianna Simpson, Marc Andreessen and Jeff Jordan. The firm’s extensive list of LPs reads like a ‘who’s who’ in venture and tech, featuring Bob Meese of Duolingo, Rick Heitzmann of FirstMark Capital, Hans Tung of GGV Capital, Garry Tan of Initialized Capital, Rick Yang of New Enterprise Associates, Charles Hudson of Precursor Ventures, Marc Merrill of Riot Games, Josh Elman of Robinhood, Julie Zhuo of Sundial, Ron Conway of SV Angel, Mark Suster of Upfront Ventures and Fred Wilson of Union Square Ventures.
Cho said they wanted to work with an LP base that crosses many geographies to tap into more global markets.
The founders explained that Spectrum of Play applies a broader definition of what gaming can do and its impact on consumers. This includes how gaming and crypto ideas make their way into education, personal finance, shopping and the internet, and help build a kind of community.
Patron wants to limit their investments to 25 companies per fund to ensure they are working with the best founders and can be more hands-on with the start-ups’ growth.
Yeh noted that more companies are starting to use design elements from games in their services. “A lot of gamers were early into free-to-play and virtual goods and other community-driven products. We feel that Web 3.0 is another example of that, where the audience is interested in engaging and interacting with new models that help them form new communities.”
Patron will also look at the world of crypto, including non-fungible tokens or other forms of digital tokens. Cho said he and Yeh feel crypto is one of the more exciting things happening within the gaming space today. However, crypto is still in its earliest stages, so its potential to enhance other sectors is still being explored, attracting funds like Patron.