REPORT | South Africa’s Carry1st Was One of the Few Winners in a Declining Web3 Gaming Market in 2023

Gaming startups raised $2 billion in funding in 2023, a new report by video game-focused VC, Konvoy Ventures, says. This figure represents a significant decrease from the $9.9 billion raised in 2021 and the $6.7 billion raised in 2022.

However, according to a 2023 Gaming Industry Report, despite experiencing a plateau in growth for the overall gaming industry, video games are still projected to expand into a $229 billion industry by the end of the decade.


Josh Chapman, Co-Founder and Managing Partner at Konvoy, said the heightened activity, spurred by tourist investors drawn in by pandemic-induced gaming surges and the support from cryptocurrency enthusiasts backing Web3 gaming, has subsided.

Chapman anticipates that the industry will return to organic growth this year [2024].

“A lot of the Web3 and crypto stuff in gaming sort of evaporated last year [2023],” Chapman said.

“The lack of Web3 gaming companies pitching in the market led to an overall drop in deal flow. That’s one subsector of gaming, everything else stayed pretty strong.”

Unsurprisingly, the gaming markets in Asia, North America, and Europe had the largest venture funding capital received across the world. On the other hand, Africa, which had witnessed a significant rise in deal activity between 2020 and 2020, saw only one VC deal in 2023, according to Konvoy Ventures.


The lone deal across Africa in 2023 was raised by Carry1st, a leading game publisher and digital commerce platform from South Africa, a pre-series B round led by BitKraft Ventures with participation from Konvoy Ventures and a16z among others.

Earlier in 2024, Carry1st went on to receive a strategic investment from the Sony Innovation Fund: Africa, the venture capital branch of Sony Group Corporation.

While Carry1st has emerged as one of Africa’s gaming players, the arrival of artificial intelligence could herald more activity for the sector across Africa and the world. According to analysts, the new technology is expected to lower the barriers in the market and bring down costs.

“We are at the early innings of AI, it will lower the ability to create something, it will also lower the barrier for some areas of gaming that have been less VC investable,” said Sofia Dolfe, a partner at Index Ventures focused on gaming.

“Triple AAA quality games on PC that had really long-form creation cycles, it didn’t lend itself as much with the venture model as mobile games, bringing down those costs we will see a lot of studios being built that leverage that technology that I’m excited about.”