Patron raises $90M to invest in gaming seed rounds

Patron is unveiling itself as a new venture capital fund with $90 million to invest in games and game technology.

The fund was started by game industry veterans Jason Oliver and Brian Cho. It’s a specialized early-stage venture firm that will invest across what the founders call the “spectrum of play.” That includes all sorts of games and related gamified sectors, such as fitness, education, and personal finance.

The founders believe that games will shape the future. They believe that the biggest opportunities in games will converge into Web 3, the name for the decentralized internet built on technologies such as blockchain, the transparent and secure digital ledger.

That means a wide array of tech for gaming natives who not only grew up with games such as Roblox and RuneScape, but also consumer apps like Discord, TikTok, Robinhood, and digital assets like nonfungible tokens (NFTs) and cryptocurrency.

“This idea of gaming intersecting with consumer apps and consumer software is actually an area where we get really excited,” Cho said. “areas like education, personal finance, fintech, and fitness are where some great companies have been built, like Duolingo, Robin Hood, Strava, and Zwift.”

Oliver and Cho believe game companies should target the gaming-native generation. Cho said that he feels like his generation spent a lot of time in the metaverse already with games like World of Warcraft and League of Legends and the accompanying esports. That makes the onset of the real metaverse feel inevitable, Cho said. But it’s also important to realize the metaverse won’t happen overnight and it isn’t good to invest too early.

“The emerging generation of consumers who are growing up on Roblox and Discord don’t think of the word ‘metaverse’,” Oliver said. “It’s who they are and how they exist with their friends when they go online. Going forward, there are going to be more and more opportunities to express yourself, to connect, and build meaningful relationships through these experiences.”

They believe that games will be the biggest onramp for consumers to learn about crypto and Web 3. And they believe in player-to-earn, where players earn rewards such as tokens in games and NFT-powered games where the NFTs authenticate one-of-a-kind digital items.

“It’s never been a better time to be a founder in games,” Oliver said in an interview with GamesBeat. “With Web 3 and the spectrum of play, the gaming space is only going to get bigger.”

And in contrast to some traditional venture capital funds, Patron will invest in companies as well as Web 3 projects and tokens.

Cho spent about a decade at Firstmark Capital and Andressen Horowitz while Oliver spent a decade at Riot Games. As such, they’re familiar with both finance and game development. They have also recruited more than 100 limited partners — investors in the fund — and many of them come from the game industry. They include Unity CEO John Riccitiello, Twitch cofounder Kevin Lin, Riot Games cofounder Marc Merrill, and a half-dozen partners from Andreessen Horowitz.

The company will invest in seed-stage rounds, meaning it aims to be the first external capital invested into a startup.

Rather than “spray and pray,” the fund will make a smaller number of investments — perhaps 25 — with a focus on quality over quantity.

Patron will invest globally and lead or co-lead investments at the seed stage. Oliver had a chance to be part of launching and operating League of Legends at Riot Games, and then he left to become an angel investor and work with a lot of different founders. He engaged with them and help them hire their core teams and develop their products.

“That became the genesis for Patron and wanted I wanted to find somebody with similar kind of background and worldview, but with a diverse skill set,” Oliver said.

He met Cho a couple of years ago and they liked working together.

“Our definition of gaming is much larger,” Oliver said. “It’s not necessarily just a game studio. We think that the world is moving to a place where you have different kinds of companies in different verticals. So whether it’s like fitness education, fintech, or crypto — we think that’s actually where some of the biggest innovations are happening, specifically around Web 3. We call this a spectrum of play, which is effectively our investment thesis.”

Cho said, “We that this is where the world is headed. And gaming’s is only going to get bigger, going beyond what we’ve grown up with.”

“We’re going to be really focused on the earliest stages, and being a strong signal for a lot of other VCs out there,” Oliver said.

The limited partners will be key for providing the experience, advice, and networks for the new entrepreneurs. The company has already closed three investments and is in the process of finalizing a fourth. But it hasn’t disclosed any of those yet.

“We’re not doing the shotgun approach,” said Cho. “It’s only going to be about 25 investments. We have to be picky. We really built Patron with the mind that we will resonate with the founders and support them. We’re focusing on quality over quantity because we truly believe there will be a Riot Games or Supercell of this generation.”

They believe they can be a strong early-stage partner for entrepreneurs.

As they both have young children, they’re also interested in gamified education, or software that is both fun to play and educational.

Oliver was born and raised in South Korea and he got to see the rise of esports and how it eventually became a mass-market pastime. That made him think about the importance of having a global perspective on investing as the gaming markets around the world are different and in varying stages of maturity. There are markets like Southeast Asia that are very exciting, he said.

“There are a lot of companies beyond those in the U.S.,” Oliver said.