Blue Ocean Games has launched a $30 million fund to invest in the next generation of indie game developers.
Backed by Krafton, the publisher of PUBG and inZoi, the new venture capital fund has an innovative investment model to support about 100 indie game developers over three years.
The mission is to transform early-stage indie game development, said Damian Lee, founder and managing partner of Blue Ocean Games, in a statement.
Lee is the former head of investments at Krafton (which owns PUBG Studios, Unknown Worlds and more) and he formed his new fund with its blessing. In fact, Krafton is the funds only backer.
Blue Ocean Games aims to discover and empower promising indie developers who fall outside traditional investment criteria. Through its unique funding model, Blue Ocean Games creates pathways for groundbreaking game concepts that might otherwise never reach players.
“There is a structural problem in the indie game industry where the gap between what investors are willing to fund, what developers dream of creating, and what players crave has grown too wide,” said Lee. “Beyond simply filling a funding gap, we are trying to reimagine the ecosystem itself. By aligning player demand with developer passion through community validation and reliable funding, our goal is to create an environment where mutual benefits naturally drive success and growth. This isn’t just about picking winners; it’s about expanding the playing field so that more visions can become reality.”
When Lee proposed the idea at Krafton, the management team was very supportive and they agreed with the need to create a healthy ecosystem in gaming, where there has been too much sinking and not enough swimming.
“It’s an early stage game fund. But part it is that, when I was investing at Krafton, I saw what I believed were structural problems,” Lee said in our interview. “There are all these macro tailwinds — about three billion-plus gamers and all these things are supportive of a healthy, lucrative game industry. But it is a very small subset of teams that are able to easily get financing. But for a lot of these lesser known indie developers working on new concepts — the funding is pretty much nonexistent.”
He added, “Either you need a popular IP or a proven team. But if they’re unknown and working new intellectual property, it’s very tough to get funding. Still, every year, we see more and more frequently these small, one to three person teams come out of nowhere with a huge hit. This month it is Blue Prince, the architecture game where you try to find a hidden room in a changing mansion.”
In spite of such innovation, Lee said he kept hearing about developers who took a lot of personal financial risk, where so many of them have to rely on their life partner for so many years.
“I tried to think about this area where a lot of creativity happens and see the opportunity, but no investor wants to touch it,” he said.
He noted that if you examine Steam’s data, it’s kind of scary, statistically. The percentage of startups that breakthrough with a hit is small. Lee asked, “Is there a way we can change this so that investors are happy, the developers are happy, and the gamers are going to be happy? We started from a blank slate.”
SAIL instead of SAFE
The fund employs a distinctive investment instrument called SAIL (Structured Agreement for
Indie Launch), which provides developers with:
● Investment at the concept stage, before the first playable build.
● Funding of $100,000 per developer (up to $300,000 per team), disbursed over two years.
● Objective, market-validation milestones rather than subjective checkpoints.
● Hybrid equity and revenue share agreement that balances developer control with investor returns.
● Developer retention of IP ownership
The fund will also provide practical support beyond financing, including incorporation assistance, bookkeeping services, and mentorship from industry veterans. Developers will be grouped in cohorts, creating a collaborative community that can share knowledge and resources. While the inaugural fund is currently optimized for solo developers and smaller teams who are first-time founders, the company plans to expand support to include larger, more experienced teams in the future through subsequent funds.
“At Krafton, we believe that innovation in the games industry often comes from the indie community, yet early-stage funding is one of the biggest challenges for new developers,” said Maria Park, head of corporate development at Krafton, in a statement. “Blue Ocean Games offers indie developers a forward-thinking model that provides critical financial support that fosters a sustainable path to success. We’re looking forward to working closely with them and seeing the incredible games that emerge from the program.”
Rising Tide game challenge
Central to Blue Ocean Games’ talent discovery approach is “Rising Tide,” a new, ongoing series of online competitions and challenges designed to help developers validate ideas, gain recognition, and advance their projects—whether or not they seek funding. The first Rising Tide challenge will launch on May 1, 2025, in partnership with Global Game Jam, with applications for direct funding opening simultaneously.
The submission period is the whole month of May, with some voting happening in June. The aim is to find about 100 teams over the next three years or so.
“Rising Tide is an idea proving ground for game developers at every stage and from every background,” explained Lee. “It’s a great opportunity to validate ideas and gain the confidence needed to dedicate more time and resources to a project. Participants can pursue funding if they choose, but there’s no obligation. By supporting developers at the concept stage with validation and potential funding, we are not just investing in games—we’re investing in the future of the industry and the next generation of creative talent.”
He noted that investors want some kind of market validation, which offers some comfort that the developers are working on the right game.
So Blue Ocean Games is also starting a game jam-like competition called the Rising Tide challenge. The pilot version of that is going to happen start May, and if it’s successful, then the team will do it every few months. Rather than show up with a whole game, developers can show off a trailer of what they think the gameplay is going to look like. That’s a much more approachable task, Lee said, and it will give judges and other observers enough information to vote. A trailer showdown can be the result.
Lee hopes this will surface multiple winners who will get a “fast track pass,” where, if you’re a winner of this Rising Tide challenge, you get some micro validation. Then there’s a very expedited application process for applying for funding from the Blue Ocean Games fund. As long as the startup completes that application, the startup is guaranteed an interview with the fund. The winners can be funded for up to $300,000 over two years.
Indie developers worldwide interested in participating in Rising Tide or seeking funding
through Blue Ocean Games are encouraged to visit this link.
The blue ocean
The company’s name comes from a focus on funding “blue ocean” concepts without tons of competitors. These concepts have market validation and empower ambitious creators to turn their ideas into commercially viable games. The fund is based in Toronto and was established with the assistance of the Toronto Global and The Embassy of Canada to South Korea.
Lee said the parties have been planning the fund since 2022, but the time has finally come to release the news.
Lee said that VCs can bring some value add to startups with key relationships, like knowledge of teams that can do external development, offloading a lot of the work from a core startup team.
Many teams often don’t have the budget for audio capabilities, and so Blue Ocean Games will have a budget for bringing in external audio people who, depending on what the team needs, can spend time with the startups.
The fund has eight people working full time, while Lee is the sole founder. A few are working on data science tools for developers, and each has a kind of specialty to help startups.
Against the tide?
I asked if Lee felt this was a counter-cyclical move on his part, given the seeming dearth of investment that has only recently started coming back in the past quarter or two.
“I noticed a lot of investors moving away from pure content, such as funding pure games, and even moving away from the early planning stage,” Lee said. “We didn’t plan this timing, but we think it’s very time appropriate because there’s a lot of people who are affected by layoffs. And we think if this first proof of concept is successful, and other investors follow suit, then it could potentially become like a standard for funding many people on their first game.”
If some are successful, then they will have a portfolio to show off when they apply for a job in the game industry.
Getting alignment between investors and developers
“We think for a lot of people, it will help fund them for two years to essentially progress their career,” he said. “But I think, separate from what’s going on in the economy, part of the reason for the game specific issue is a lot of investments have been copying what tech world has been doing. For example, the equity investments are typically SAFEs, and it’s almost exactly what Y Combinator does to fund startups.”
Many assume a startup’s goal is to become a unicorn, or getting valued at $1 billion. So lots of entrepreneurs cycle through a bunch of ideas in search of the unicorn idea. But many indie developers aren’t in it to make unicorns. They are passionate about making a particular game, Lee said.
“They want to make a game that they’re passionate about even if the market potential is a bit smaller than a unicorn,” he said. “This [focus on unicorns in tech] creates a misalignment between investors and game developers. It leads to investors being disappointed. So we actually created a completely new, standardized investment contract. We call it SAIL for Blue Ocean Games. So the acronym is Structured Agreement for Indie Launch, or SAIL.”
Lee said he believes this will slice the pie in the right way, giving developers what is most important to them and to investors what is most important to them.
“It’s going to be a win win solution funding concepts,” he said.
Lee said he didn’t want to start a new publisher because such companies can only work with a few games at a time that require a lot of resources. Game funds also tend to move away from funding games to funding gamification, adjacent industries or platforms.
“Our mission is to build an ecosystem here,” he said. “Part of the way we diversify the risk is because these are small check sizes, a hundred $300,000 checks.”