Happy New Year 2022!
2021 was Great!
Since GFR Fund has been launched, it will be in its seventh year in 2022. To date, we have invested in more than 50 companies, and our portfolio has shown impressive growth. In particular, last year was a very good year with RTFKT being acquired by Nike. Globally, we witnessed an active year in terms of investment, with $621B invested worldwide, which is an exponential 111% growth over the $294B invested in 2020. The investment climate for startups continues to be a favorable one. ( 'State Of Venture 2021 Report
' CB Insights)
In 2022, GFR Fund will continue to look at the Entertainment x Consumer space, with a focus on Seed & Series A. Although the domain remains largely the same, the market sentiment and trend towards consumer entertainment has evolved significantly amidst the COVID-19 pandemic. In particular, gaming, creator economy, and NFT/Blockchain are three sectors that have transformed radically due to the pandemic.
Although gaming was a major sector even before the pandemic, it remains to be one of the sectors that has grown most exponentially in 2020 and 2021. Not only were there more stay-home opportunities due to the global health crisis, rise in trends such as the Metaverse, NFT, Web 3.0 that is compatible with gaming have facilitated the boom in the gaming sector. Roblox and other UGC-type platforms are also gaining momentum, especially among the Gen Zs.
The Creator Economy
The creator economy is another sector that thrived in 2020 and 2021. Like gaming, it is a sector that has benefited from the lockdowns as many people had to scramble to look for alternative sources of income. As creators become increasingly active, many startups like Patreon (raised $155M in April 2021 with a market cap of $4B, TechCrunch) have emerged to support creators. We believe that the market for creators will continue to grow.
The intersection of Blockchain technology and entertainment is one of the most exciting spaces in 2021. With the resounding success of Axie Infinity and RTFTK, startups are flooding into the market one after another. NFT auction marketplace OpenSea raised $300M in Series C funding ($13.3B market cap), a ballooning valuation up from $1.5B just 6 months ago. This is indicative of huge volume growth of NFT transactions. On the other hand, there are a number of startups hopping on the trend and entering the market, making this a highly competitive sector.
There are many other sectors that have grown throughout 2020 and 2021. For example, we have seen significant changes in XR, eSports, Media, Fintech, and Marketplace. As the pandemic has inevitably remodelled the new normal for entertainment, we believe that more seeds of innovation will continue to be planted in 2022. I believe we will see stronger startup growth than ever before. On the other hand, we may see a slight slowdown in the investment climate, with the IPO market showing some signs of slowing down. Nonetheless, we look forward to seeing people and products that continue to weather the storm and come out the other side, stronger than before.
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