Sanctor Capital launches $20M fund to bootstrap GameFi, DeFi projects

Projects like Axie Infinity and Decentraland have shined the spotlight on GameFi, a new trend that refers to the financialization of gaming.

Blockchain-focused investment firm Sanctor Capital has raised $20 million to fund emerging projects in the cryptocurrency space, offering the latest evidence that venture capital continues to flood the market. 

The investment fund will be used to bootstrap projects in some of crypto’s hottest segments, including DeFi, GameFi and cross-chain infrastructure development, Sanctor announced Tuesday. In addition to funding early-stage companies, Sanctor will also provide guidance to blockchain founders on how to launch and scale their products.

DeFi, which stands for decentralized finance, has become one of crypto’s most valuable industries with over $245 billion in total value locked. GameFi, meanwhile, refers to the financialization of gaming through DeFi and nonfungible tokens, or NFTs. Projects like Axie Infinity and Decentraland have enjoyed enormous success as early pioneers of GameFi. Facebook’s decision to rebrand itself to Meta and build out its own “metaverse” is also drawing attention to the economics of virtual gaming.

When asked about the evaluation criteria for selecting companies to fund, Sanctor Capital CEO Han Kao highlighted “dozens of factors,” including the skills and experience of the team and whether their vision aligns with Sanctor’s outlook on the industry over the next five-to-ten years.

He also described GameFi as being one of the best opportunities for blockchain technology to gain mass adoption. “To us, GameFi has the potential to be the catalyst for the long awaited “mass adoption” we have all been looking for as crypto natives,” Kao said, adding: 

“Hundreds of millions of gamers from around the world, especially from emerging economies like [Southeast] Asia and [Latin America], come together and interact with the existing blockchain economy through gaming, lending, borrowing, and trading. It has the potential to not just bank the un-bank, but to transform world labor economies and simultaneously educate financial literacy to all participants.”

Sanctor isn’t the only investor getting in on GameFi. Huobi Group, the operating company behind one of the world’s largest crypto exchanges, recently launched a $10 million fund to invest in early-stage GameFi projects.

Related: Rally founders launch crypto venture studio backed by a16z partner

From Silicon Valley to Singapore, venture capital is betting big on crypto and blockchain. This year alone, venture funds have allocated a whopping $17 billion to crypto- and blockchain-focused startups, according to data provider PitchDeck. By comparison, venture capital investments in crypto were just over $5 billion in all of 2020.