The “metaverse” is a frequently used but rarely defined term in the gaming industry. In our view, a practical definition of the metaverse is “a collection of digital experiences that exist in parallel with the real world.” When we consider the metaverse today, Roblox is a particularly compelling application as the low-code programming environment makes it a highly customizable UGC platform. Today, over 200 million people (primarily kids, teens, and young adults) play and create in Roblox. What better way to captivate an audience than by allowing that audience to make their own games?
However, one of the key limitations (and opportunities) in the Roblox ecosystem is the fragmented pool of content creation talent. When we first met Gamefam CEO, Joe Ferencz, back in early 2020, he was building the only publisher in a Roblox game ecosystem that today has 50MM+ DAU and 200MM+ MAU. Back then, there was also a fundamental lack of professionalization in a game environment that was generating more than $500 million in annual revenue. Through their professional management of their titles, they were able to capture roughly 3% of the Roblox user base at that time (today it’s a multiple of that number). We were thrilled to participate in their Seed round alongside other great investors (Play Ventures, Galaxy Interactive, Bessemer, and others).
Rather than try to directly compete with the massive existing pool of developers, Gamefam realized that they could create value for the entire ecosystem by partnering with existing developers and helping them achieve their goals. The company was then able to provide product, marketing support, and cross-selling opportunities that led to the value accretive synergies.
In terms of finding the right partners and objectively evaluating content performance, Gamefam has acquired and then co-developed its own internal technology called RoMonitor. This tech allows them to quickly digest and analyze all of the game-specific data on Roblox via intuitive, visual dashboards. They can then filter and manipulate the information to determine which games are ripe for potential, underperforming, or outperforming.
While the initial seed investment was unannounced, we have been thrilled to be in Gamefam’s corner since May 2020. Since that initial investment, the team has executed on their partnership growth strategy and continued to become a leader on the Roblox platform. As of today, they are currently the second most visited studio on Roblox with over [15 million] daily users across their various game titles. Although Gamefam has historically been focused on Roblox, the team is passionate about metaverse gaming as the next great disruption in consumer tech and media.
Given the continued performance of this fantastic team, we are thrilled to announce that we led Gamefam’s latest round of funding through a $25 million Series A. Additional investors include Bessemer Venture Partners, Galaxy Interactive, Play Ventures, and Makers Fund.