Hiro eyes EUR 400 hard-cap for metaverse and gaming fund by year-end

The UK-based sponsor has already raised the bulk of its EUR 300m target for Hiro Capital II following its launch earlier in the year, he said.

"Fundraising has been straightforward and our [debut] fund has been performing well," Alvarez said. "The market was choppy earlier in the year and we invested broadly across the high growth space.”

Fund II’s investor base consists of some of the “biggest” games and technology companies and also includes global and US-based blue chip institutional LPs, said Alvarez.

Crestbridge provided admin, management & corporate governance support in Luxembourg.

Investments
Fund II started investing last December following the full deployment of Fund I, which closed on EUR 115m last year.

Half of the new vehicle is expected to be deployed in 60 investments across seed, Series A and early B stage companies, with the remaining half used for follow on investments in those companies.

It has made six investments to date: San Francisco-based Frameplay, an in-game advertising business; UK-based Carv, a ski data provider; UK-based Firestoke, a publisher of indie PC and Console games; Netherlands-based Team Liquid, an e-sport organisation; Israel-based Incredibuild, a platform for development processes; and US-based Atom Switch, a game developer.

Hiro has a pipeline of opportunities particularly across UK, Europe and Israel and will continue investing despite the public market being choppy and the valuation environment having changed. “Valuations are more sensible, which is a good thing,” Alvarez said.

The gaming and metaverse dedicated fund was launched in February 2022 and will participate in series-A and series-B funding rounds, across UK, US and Europe, as previously reported. The VC has a UK, Europe and Israel bias, adding that a third of deals is expected to be made in the US and 10-15% in other markets such as India.

Alvarez declined to comment on returns for Fund I but said it has made 21 investments so far, eight follow-on investments, and deployed around 90% over the last three years. The fund will only make follow-on investments now, he added.

At the time of its first close, Fund I had 25 LPs consisting of family offices, high net worth individuals, strategic and institutional investors backed the fund.

[Editor's note: Subsequent to publication, the article has been updated to include details on deployment of funds from the new vehicle.]

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