NewGame Capital fund aims to invest £50m in digital gambling startups

Kicks off with social bingo service Avatingo, with plans to target casual, social and mobile gaming companies.

NewGame Capital Advisers has launched a new fund to invest in digital gambling startups, with £50 million to sink into casual, social and mobile services, as well as online.

The NewGame Capital LP fund is focused on early-stage investments, and will ultimately invest in up to 15 companies. Advisers to the fund include the founders of online bingo company Cashcade - now owned by bwin - and merchant bank NewShore Partners. bwin has made a £15 million commitment to the new fund, while the investment team are putting in another £1 million, and looking for more backers to raise £50 million for the fund in total.

"We see huge innovation taking place across the social, casual, mobile and real-money gaming area," says bwin chief financial offers Martin Weigold. "NewGame Capital has a rare combination of entrepreneurial, strategic and financial expertise. We believe that this will allow it not only to identify companies with innovative business models, but also to guide them towards long-term success."

NewGame Capital's first investment is in Avatingo, which is described as "a multi-platform virtual world with a personalised  social bingo experience". For now it appears to be Facebook-only, but that 'multi-platform' hints at possible mobile expansion.

NewGame adviser Patrick Southon sees a bright future for the digital gambling sector as a whole. "With the growth of micro-payments and other forms of paid-participation, the lines between online gaming and online gambling have started to blur," he says.

"We anticipate continued strong market growth in monetised digital gaming and are seeing a very vibrant start-up scene related to the sector both in Europe and North America."