A16z Games has started a new Speedrun accelerator and it plans to invest up to $75 million in the next class of pre-seed startups at the intersection of games and technology.
The first Speedrun came together with speed, as the venture capital firm recruited its first class of 32 startups starting at the Game Developers Conference in March.
A16z received more than 1,600 applications and sorted through them in a month. After doing 200 interviews, it chose 32 companies and all of them received investments from A16z. By May, the startups went through an intense four-week Speedrun accelerator program. On top of that, about 80% of the startups received follow-on funding from other investors after a demo day in June.
With the new class, A16z will combine the investment with coaching by some of the games industry’s most seasoned talent, community development across the cohort and industry, and content tailored towards early-stage startups. This time, the program will run for ten weeks starting in January and ending on March 29 during the GDC. The program will culminate with a demo day for the best early-stage investors in the industry to meet some of the best entrepreneurs across Games x Tech.
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Applications for Speedrun 2024 are open from now until September 30. Inteviews will be done by October 15. The program’s investment is set at $500,000 for each startup, and the accelerator will be located in the San Francisco Bay Area for the entire duration of the program. Startups are asked to appear in person. While this program focuses on pre-seed companies, A16z itself will still invest in game companies at all stages of growth.
Activities include in-person kickoff, live speakers and panels, dinners and mixers, and an invite-only demo day. The Speedrun ten-week program begins in January and ends at the Game Developers Conference (GDC) in March.
The Speedrun class showcased a diverse group of companies, including game development studios, platform developers, and tool creators. These companies had founders in the game industry as well as diverse fields such as edtech, biohealth, mental health, Web3, and AI.
Lots of support
The Speedrun alumni roster includes founders from companies such as Zynga, Sega, Bungie, Nintendo, Rovio, Telltale Games, Epic Games, and Supercell, as well as serial entrepreneurs from organizations like YC, Human Interest, Glu, Knock Knock, and JCSoft.
The demo day included 260 guests from the gaming and tech investment circles. Notable figures attending included the CEO of Krafton, a cofounder of Twitch, and a board member of Epic. Following the demo day, A16z hosted an industry big party, A16z Games x 100 Thieves: City of Games, which drew a crowd of over 700 VIP guests and celebrated the evolution of video games in culture. The event concluded with a concert by artists Zedd and Noah J.
Ultimately, Speedrun is not just about showcases during a demo day; it’s about changing the way we think about games, technology, and the types of founders who create them, A16z said.
Through a deliberate blend of education, mentorship, community, and investment, A16z Games firmly believes that Speedrun will help propel talented studios, platform developers, and tool creators to trailblaze the future of the games industry and media content at large.
Origins
Speedrun began with a simple question: how can A16z support the best gaming founders at the earliest stages of their journey?
The answer was to craft a bespoke accelerator for the gaming industry. It’s hard to start something new in games. It can be difficult for great engineers to innovate within behemoth companies, A16z said; the early venture ecosystem for entertainment startups is still nascent and many games are beholden to challenges in production, publishing, and plain old luck.
A couple of the A16z leaders included Andrew Lee, entrepreneur in residence, and partner Josh Lu. Lee joined after doing stints investing at Initialized Capital and running a couple of companies — one focused on AI and another one in games. He said he knows how it feels to be an entrepreneur and wished that he had something like the Speedrun accelerator to help him get off the ground.
“I didn’t know anybody within the gaming industry and there were so many pitfalls that I encountered,” Lee said. “We knew there was just this latent group of people who were interested in starting game companies. How can we accelerate them? How can we get them to move from zero to one? So we started the program very quickly. And we were just floored by the response of 1,600 applications.”
He added, “The craziest part was, at our demo day, 80% of those companies received follow-on investment, which we were also astounded by, because it just means that the games industry is also looking for some of these heroic founders.”
Lu had experience at Blizzard and Zynga before joining A16z a little less than a year ago. He absorbed all of the learnings from the first cohort of Speedrun and thought about how to do it different the second time around and just make it bigger and better each time.
“Helping the game industry is the net result,” he said.
Many of the applicants didn’t have companies at the time they applied. Some were in the tech space and dreamed of dong something with games and tech.
Lee said, “I honestly wish I had this 15 years ago. If you want to make a game, it’s just really hard to do. And now there is a vehicle for you to take in the intersection of games and technology.”
The knowledge shared at events like the GDC tends to be geared towards employees of larger companies, leaving a unique set of knowledge untapped for founders of gaming startups.
However, a significant amount of high impact products and companies have, in fact, come from first-time founders. Success stories like Notch’s Minecraft, Riot Games, or Unity (one of the biggest gaming engines born out of a failed game) show us how fresh perspectives can transform the industry landscape, Lee said.
A16z said these companies were inspiring and diverse, in stage, in idea, and in the type of support they needed. There were startups with founders who had been working on their idea as a side project for a long time along with groups of founders who hadn’t even incorporated their company yet.
The goal was to empower participants to incorporate their companies, secure immediate funding, and open the path for them to whole-heartedly pursue their passions and innovations.
To A16z’s knowledge, this is the first example in the games industry of a pre-seed accelerator program that closes the gap between stage zero and early stage startups. Speedrun is an example of the commitment A16z Games is making to build the future of the industry by empowering startups to build the interactive future.
Meet the Speedrunners
The demo day showcased a diverse group of companies, including game development studios (57%), platform developers (32%), and tool creators (36%). The last cohort had companies in AI, VR, Web3, pure game studios and more.
While 55% of the Speedrun class worked from San Francisco, the group had representation from many locations across the United States, including Austin, Seattle, and Los Angeles.
The accelerator also drew founders from global game industry powerhouses like the United Kingdom and Finland, as well as from innovative tech hubs in Portugal, Norway, India, and Ukraine. A16z said this broad representation shows Speedrun’s ability to impact the world wide games business and player community.
Further highlighting the diverse expertise participating, The program included founders from influential technology tools companies such as Worldcoin, Deepmind, Unity, Discord, AppNexus, Roblox, Apple, and Xbox highlight the diverse expertise nurtured within the program.
Games are rapidly becoming the greatest drivers of entertainment, the nexus for social media, and cultural landmarks (e.g., Super Mario or The Last of Us). And A16z said it believes that innovation and entrepreneurship should be at the heart of this wave.
Lots of bets?
I asked if the rapid pace of going through 1,600 applicants in a month and coming up with 32 candidates after 200 interviews seemed like a bit of a rush. And since all 32 received investments, it seemed like a “spray and pray” approach. But Lu said each applicant who was accepted into the accelerator automatically received an investment.
“It’s not spray and pray so much as we care deeply about finding interesting intersections across all of games, industry and technology,” Lu said. “We start at the very top of the funnel, and it’s quite wide. But we spend a lot of time getting to know the founders and understanding what they want to do and how they might fit within out program.”
Lee said they were looking for the best pre-seed founders, an area where these is a vacuum in games. It wasn’t just a lot of students. There were applicants in areas such as AI, consumer, payments and more.
“When we then started our demo day, it was just astounding, the number of vendors who showed up,” Lee said. “It turns out we had more than 260 ecosystem partners and investors.”
Lu added, “There are a lot of people really interested in helping to develop the games industry and want to invest in companies but don’t really know how to start.”
Lee said, “That’s the thing that I think we’re seeing in both sides of the gaming industry. Not only do you have companies who need to basically get that acceleration. But on the other side are individuals who are angel investors or just don’t know where to find these companies. So how do we unlock that in the very early stages?”
Lee said he was a fan of Y Combinator, but he notes there is nothing like this new accelerator at the intersection of games and technology. (There were some a long time ago like YetiZen but not that many big efforts lately). The program is customized for next-generation consumers and gamers.
Lu said A16z isn’t doing this because of competition among game funds. Rather, he said it’s born out of a desire to help develop gaming’s ecosystem.
Hot categories?
Lu said there was a lot of energy in the AI and games part of the market in terms of applicants. There were a couple of AI companies in the last batch, he said.
“We are prepared to support any and all types of founders,” Lu said. “Of course we’re also optimists about AI, and we are excited to see how it impacts the games industry. We’re preparing our companies on how to use AI.”
But rather than focus on game industry categories like VR or esports, A16z will focus more on the founders and their passion for what they’re doing. Do they have the ability to ship products? That matters more than the actual space they’re targeting, Lu said.
The next round: Speedrun 2024
Lu said that the applicants who didn’t get chosen the first time around can apply again, as the first cohort had a limited capacity and there will likely be more accepted in the second group.
During the previous accelerator class, entrepreneurs like Mark Pincus gave talks and shared stories with the founders. Operators at companies in the industry gave their lessons.
“Our vision for this is we are spearheading the effort to help the games industry along, but we also want to enlist the games industry in this effort,” Lu said. “Bringing more and more mentors and speakers into the program is something that we definitely want to do.”
“The previous founders definitely want to help the next generation,” Lee said. “They have just so much knowledge and they want to share. The games industry moves so quickly that and we’re excited to see what happens in the next cohort.”
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