Is Alsop Louie Partners poised to be the next biggest gaming fund in Silicon Valley?

Don Ong  |  Singapore
Published 2016-11-02 12:50:19

It’s tough to make good bets in gaming, but we’ve been following the repeated successes of a San Francisco venture capital firm, Alsop Louie Partners.

Their first gaming investment was in Twitch in 2012, which led to a $1 billion exit. Next up was Niantic Labs, which launched the breakout hit Pokemon GO this year.

Now, the firm has made another big bet on a gaming company, Blackstorm.

In the last few years, the firm has had quite the success in gaming, and this raises a big question: is Alsop Louie poised to be the next biggest gaming fund in Silicon Valley?

The First Investment: Twitch

Justin Khan of Twitch
Justin Khan of Twitch

The firm’s first gaming investment was in Twitch and it led to a $1 billion exit.

Twitch, a popular social video platform, allows gamers to share their moves with viewers around the world. Combining replays, streams, talk shows and e-sports tournaments, Twitch is the go-to place for gaming fans.

Alsop Louie backed the company in 2012, and their investment in Twitch certainly paid off – the unicorn company was purchased by Amazon two years later for nearly $1 billion.

Can this amazing achievement be replicated?

The Second Big Hit: Pokemon GO

John Hanke of Niantic
John Hanke of Niantic

If you don’t recognise the name Niantic, you should – it shows up on the screen every time you launch Pokemon GO.

With Pokemon GO, Niantic didn’t just build a game, they built a phenomenon, generating massive profits from their millions upon millions of committed users. Like Twitch, Alsop Louie made a smart investment in Niantic Labs, joining the board of directors in 2015.

Of course, while Pokemon GO has been immensely popular, it’s unclear if they will be able to hold onto their users as the game and their players continue to evolve.

Third Big Gaming Bet: Blackstorm

Michael Carter, Ernestine Fu, Tom Fairfield, and Martin Hunt of Blackstorm Labs
Michael Carter, Ernestine Fu, Tom Fairfield, and Martin Hunt of Blackstorm Labs

Recently, the VC firm has quietly invested in a small Silicon Valley startup Blackstorm Labs, a company with the mission to build alternatives to Apple and Google’s app stores.

We have yet to see how exactly these alternative app stores will be accessed, but Blackstorm has already raised $33.5 million based on their plans.

Blackstorm Labs’ game engineers and designers, with game studio head Jimmy Griffith in the middle

Blackstorm Doubles-Down On Gaming With Major Releases In The Pipeline

One of Blackstorm’s primary ventures, Blackstorm Games, is said to be launching games on multiple major platforms in the next few months. Blackstorm Games builds and releases content for emerging platforms like messengers, mobile browsers, and AR/VR applications.

Although still a young company, Blackstorm Executive Chairman Ernestine Fu shared, “We have big plans at Blackstorm Games to reach millions and billions of people.”

Fu is already a well-known investor and also a partner at Alsop Louie.

Luck Or Skill? Alsop Louie Founder Gilman Louie Ran Gaming Company Spectrum Holobyte

The fund’s leadership team has a rich history in gaming.

Founding partner Gilman Louie designed and built the Falcon series of F-16 flight simulator at Spectrum Holobyte, where he later became chairman.

The company is also widely known for bringing Tetris to the United States.

Gaming industry veteran Tom Kalinske is also a partner at Alsop Louie, before which he ran Sega of America during the years of the Genesis console.

Fund partner Tom Kalinske ran Sega during the Golden Age
Fund partner Tom Kalinske ran Sega during the Golden Age

Another partner Jim Whims managed the impressive launch of PlayStation in North America.

Despite the background of the firm’s members, it is notable just how few gaming-related investments the team has made – just three, in fact.

Overall, we’re optimistic, but of course major questions remain.

Twitch has proven themselves, but we have yet to see if Niantic will continue to engage users and generate revenue; and Blackstorm is still a young company.

Do you think this will be the next big gaming fund in Silicon Valley?

Feature Image Credit: VentureBeat

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