Gaming fund vgames raises $500 million to help startups grow without giving up equity
The Israeli fund is launching a new financing model tied to user-generated revenue, targeting companies that need capital to scale but want to avoid another funding round.
The Israeli gaming fund vgames has raised $500 million for a new financing platform aimed at gaming and consumer companies. The new capital was raised with the backing of Phoenix.
Since its establishment in 2020, vgames has invested in more than 50 companies, built a portfolio of leading businesses in the industry, and positioned itself as a partner for entrepreneurs from the early idea stage through global expansion.
Until now, the fund has primarily operated through the traditional equity investment model, acquiring stakes in companies.
The fund is now launching a new growth financing model designed to address one of the key challenges facing successful gaming and consumer companies: financing user acquisition and expansion without requiring additional equity fundraising.
Alongside its early-stage investments, vgames will provide financing solutions tailored to companies in the growth stage, based on the view that companies’ capital needs evolve over time. In the early stages, companies typically need funding to build products and teams, while at later stages the main challenge becomes financing growth and customer acquisition.
Unlike traditional financing or bank loans, repayment under the new model is not based on a fixed schedule. Instead, it is linked to the revenue generated by the user groups financed through the investment, meaning the financing structure is tied directly to company performance.
As part of the initiative, vgames is collaborating with General Catalyst, one of the world’s leading venture capital firms. The two funds will jointly identify and evaluate potential companies, drawing on their experience with growth models, including through portfolio companies such as SuperPlay.
To date, more than $500 million has been deployed to gaming and consumer companies worldwide through vgames’ investment activities. The fund plans to expand the new financing model significantly, with a goal of providing more than $500 million in additional financing to eligible companies in the coming years.
In a conversation with Calcalist, founder and managing partner Eitan Reisel said the new model is aimed at both gaming companies and consumer businesses, which often face similar challenges when scaling internationally.
“From day one, we wanted to be much more than an investment fund. Our goal was to be the partner of entrepreneurs at every stage, from the initial idea to turning the company into a global leader,” Reisel said. “As companies mature, their needs change. Through the new financing solution, we enable them to continue growing without giving up ownership in the company and without using equity capital for purposes that can be financed more efficiently.”
Over the past several years, vgames has backed dozens of gaming and consumer companies worldwide, including SuperPlay, Candivore, Innplay Labs, 44pixels and PeerPlay. The fund currently manages approximately $500 million in assets and operates globally.
The new financing model targets a challenge particularly common in gaming, consumer and mobile businesses: the need to spend heavily on user acquisition before those users generate meaningful revenue. In many cases, companies must wait months or even more than a year to recover marketing investments, forcing them to use capital raised from investors to fund growth activities.
