Gaming-focused venture capital firm Bitkraft raised $220.6 million for its second "token fund," which had a total target of $240 million, according to a March 30 filing with the U.S. Securities and Exchange Commission (SEC).

The firm launched a similar fund in October 2021, with $75 million in committed capital that was seeking to invest in blockchain gaming and digital entertainment.

For the new fund, however, Bitkraft couldn’t comment on the nature of the investment mandate but partner Carlos Pereira outlined the firm’s general Web3 investment strategy during an interview with CoinDesk.

Founded in 2016 by gaming and esports veteran Jens Hilgers, Bitkraft focuses on seed through Series B investments in game studios, gaming platforms and game-related technology across both Web2 and Web3.

Bitkraft has grown to approximately $600 million in assets under management (with one-third devoted to Web3 opportunities) and has become an registered investment advisor. The firm’s funds have included an esports-focused and a general venture capital fund and the two "token" funds.

“We’re gaming investors, first and foremost, with an operating and investing background that precedes the Web3 gaming bull run by a lot,” said Pereira. “We’re focused on underwriting great games with the tools that we have. Now in crypto, with the experience that we have as players, we want to see the economic rails evolve,” he added.

Pereira said Bitkraft’s move into gaming was motivated by the team’s experience as gamers rather than a desire to get in on the GameFi boom that hit in 2021 as play-to-earn titles like Axie Infinity made numerous headlines – and dollars.

Bitkraft brings a background in funding Web2 studios that build complex environments and are looking for similar Web3 projects. The firm favors developers that have a higher-than-average amount of experience, often gained through decades of experience at Web2 studios.

Bitkraft’s recent investments have included Eve Online developer CCP Games and blockchain-enabled mobile game developer Jungle. The firm's investments happen through a combination of equity and token purchases.

“If we own both the equity and the token, we can design a game that maximizes value creation through primary sales and maximizes value creation through secondary sales,” explained Pereira, noting the importance of “figuring out a business model that works and allocating that value between equity and tokens.”

The bull market of 2021 attracted new game developers to the Web3 space, who received venture capital backing through the first half of 2022. Despite the bear market that followed, that narrative hasn't finished playing out yet. Those developers are still in the early stages of their two- to four-year development cycles, Pereira noted.

Read more: Esports Giant TSM Enters Into Web3 Gaming Partnership With Avalanche

CORRECTION (UTC 21:27): Corrects assets under management figure and edits headline for clarity.