Crowdfunding and investment platform Fig has announced it's secured $7.84m of funding in its first round of venture capital financing, a sum the company says will allow it to expand the number of game projects it can host going forward.
VC firms Spark Capital and Greycroft led the round of Series A financing, with participation from Resolute Ventures, NextView Ventures and Draft Ventures.
Unlike other traditional crowdfunding platforms, Fig also allows fans to invest in a game's development and receive a portion of the game's profits upon release. This is in addition to the usual rewards-based structure offered by other crowdfunding sites.
The opportunity for fans to invest in the games they believe in opens up an entirely new narrative in the evolution of crowdfunding,” Fig CEO Justin Bailey stated.
Fans on our platform have already demonstrated that they're willing to invest over 20 times more money per person for equity over rewards. This creates an avenue of funding for independent games that has never existed before. In addition, our model is allowing investors to reduce content risk by finding out if there's sufficient market demand through fan funding prior to completing development.
"Looking forward, we're exploring the possibility of amplifying the impact of fans even further by inviting institutional investors who have already expressed interest in our unique model to provide matching funds across our platform."
Spark Capital's Nabeel Hyatt commented: "Fig is singular in video games in that it is the first to allow fan investors to participate in the upside of a video game's financial performance. Investors on Fig don't have to wait for a company to be sold before they can reap returns, an occurrence that is rare and can take 7 to 10 years."
Greycroft venture partner Jon Goldman added:"Interactive Entertainment is a $100 billion-a-year industry yet many talented, veteran teams are still constrained by lack of resources. Fig provides a new avenue for funding that brings makers and players into an entirely new relationship, which should foster innovation and help this amazing creative industry grow even bigger."
In 2016, Fig hosted four of the top ten biggest-crowdfunded games of that year, chief among which was Double Fine's Psychonauts 2, which raised 51 per cent of its $3.8m through traditional rewards crowdfunding and 49 per cent through Fig's investment structure.
Last year, Fig had a 78 per cent campaign success rate, with backers pledging a total of $8.7m in funds across its various projects. Investment pledges made up 62.1 per cent of that figure, with rewards pledges making up the last 37.9 per cent.