Entrepreneurs seeking funding face a range of challenges that includes tackling the learning curve necessary to find the right investor for their startup. The most fundamental advice given to them is to seek out investors who have experience in the startup’s industry or have successfully funded a startup in that industry. Leading video game commerce company Xsolla is seeking to help gaming entrepreneurs and developers with the launch of their platform that connects investors interested in funding gaming startups.
“We’re very pleased to announce a new class of securities that earn a return from game revenues. Independent game developers have few ways of bringing their projects to life, and many investors have no easy way to filter and understand the opportunities in this ever-expanding segment of the gaming market,” said Chris Hewish, President of Xsolla.
Already in place are Xsolla’s video game commerce tools that have helped over 1,500 developers and publishers to date. They have assisted developers in marketing, selling, connecting, and optimizing over 2,400 games. Their new goal is to facilitate the promising games going to market through their Xsolla Game Investment Platform. This includes Xsolla and its affiliates contributing up to $40 million alongside accredited investors to further expand opportunities for developers on the new platform
Xsolla’s established position in gaming gives them the necessary insight for the launch of their investment platform. They see this as an opportunity for the gaming industry that now reaches $174.9 billion in revenue for 2020. The growth of smaller independent developers is also now an important part of the industry which is highly fragmented and therefore a challenge for those developers in finding the right investors to support their efforts.
The platform facilitates the funding of gaming startups in four critical ways by:
- Simplifying the funding process for independent developers,
- Facilitating introductions to accredited investors by Xsolla’s experts selecting best games,
- Offering a revenue-split structure between independent game developers and accredited investors that aligns their interests, and
- Enabling investors to diversify capital and risk across multiple projects.
From the funders’ side, finding the best of the best that are worthy of funding is their goal, but it is very time-consuming to find those deals, making the platform very appealing.
“Our expertise in video game monetization, combined with a large network of indie game developers, enables us to leverage our position to link developers with serious, accredited investors – and we can’t wait to see the next big game take off because of it.”
The Xsolla Game Investment Platform helps game developers find funding in all stages through launch, while they are able to retain control over their product. Accredited investors have the benefit of finding projects for investment that are in development and have indicated they are in need of additional funding. The efficiency of the platform is a very clear benefit for both entrepreneurs and investors.
The revenue split-based feature offers investors a way to receive returns from the sales of games rather than waiting for a liquidity event in the case of equity-based investments. The model is based on Xsolla’s experience fostering strong commercial relationships throughout the industry, and in partnership with leading independent game studios.
With the platform now selectively onboarding investors and game developers, the funding of gaming startups is now underway with a new and elevated process.
