Hydratac raises $3M for ‘extremely realistic’ shooter game

Hydratac is a small company with just seven people working on a next-generation “extremely realistic” shooter game, and it has raised $3 million.

The company is run by former venture capitalist Louis Gresham and supported by former Treyarch studio co-head Dan Bunting, who is a Hydratac board member. They have essentially switched roles in the process of bringing this studio to life.

“As a VC, I used to joke that it would take a long time for me to even the scales with time on the
investor side, given I had spent 15 years pre-VC as an entrepreneur/exec/operator/builder at
multiple cofounded startups, Google X, Riot Games, and Deloitte,” Gresham said. “Today I’m ecstatic to announce that those scales have tipped back the other way – I’m returning to entrepreneurship after spending almost five years as cofounder/partner at 1am Gaming VC and our parent firm March Capital.”

He added, “Dan Bunting (formerly of Call of Duty) is going to be my board member. We’re building an extremely realistic military simulation with an initial focus on close-quarters battle.”

Bunting spent his career building the Call of Duty franchise at Treyarch, where he rose to studio co-head and helped create games such as the Call of Duty: Black Ops and Zombies franchises. He left Activision amid some of the turmoil the company went through in the Me-Too era. Bunting has not talked publicly about those circumstances in detail but there has been plenty written about it.

Gresham said the work on Hydratac started last year and he realized “it was simply too massive, and too perfect a fit, for us to not have me plant a flag in the gap.”

First-person shooters are a massive market, the team had a lot of experience and an interesting tech and product. So he pulled the trigger and joined them as CEO.

Late last year, the company raised $3 million in initial capital from lead 1am Gaming VC and HGM Fund. The team has seven full-time people and it has the first iteration of the product up and running internally. The company is testing daily, has several open positions, and is on schedule for public launch in 2025, Gresham said.

“Though we’re not ready to unveil quite everything publicly about what we’re building yet (and
who’s building it, including my cofounder, given the even crazier attention these names will
attract in the community!), here’s what we can share today: we’re developing what will be an
unprecedentedly high fidelity military simulation, starting with CQB, and expanding from there.

He said Hydratac is a portmanteau of “Hydra Tactical”, “Hydra” for short.

The first product will be a PC consumer release later this year that’s built on a proprietary, battle-tested frontend+backend (hence the speed to market), and the team already incorporating specs from the military for their use cases – which will further enhance what players get to experience.

“That flywheel effect was a huge multiplier for us at my last venture funded / cofounded startup
Cape (backed by NEA, Google, others) and acquired by Motorola Solutions (www.cape.com),
where we gave players on PC the ability to fly and dogfight real drones (virtual weapons) around
the world with near-zero latency camera and control, and then gave the same capability to our
military and police customers,” Gresham said.

The idea that became Hydra came together after initial brainstorming sessions last year with
some of the best minds in military FPS, tactical shooters, hardcore business-to-consumer milsims, and FPS in general, as well as military folks both on the uniformed and private sector sides of the table.

“The immediate enthusiasm and insight from Dan Bunting, former studio head at Treyarch for 20
years of Call of Duty Black Ops titles, who had been waiting for years to see this executed, was
a massive boost,” Gresham said.

Bunting led the investment on behalf of 1am in his capacity as venture partner, and serves on the board. Essentially, Gresham and Bunting switched jobs. In an interview, Bunting said after learning so much working for one studio, he wants to share some of his experience as a VC and adviser to lots of gaming entrepreneurs.

“This would not have been possible without the incredible support of my 1am cofounders Gregory Milken, whom I joined at March Capital to kick off our very first gaming fund in Q4 2019, and Francisco Liquido (also cofounder of my first company way back in 2004) who spun out 1am Gaming VC as its own firm with us in Q2 2023; founder Par Chadha and the whole crew at HGM Fund, whose holdings span over $B in revenue, 15K employees, and over 20 countries; and the legion of others who devoted their expertise, mentorship, and support to getting us off the ground,” Gresham said.

More details about the game will be coming later. Since it’s a new company, the team has thought about AI, but it isn’t yet implementing anything that could be considered a transformative AI tool.

“AI, is just not quite there yet for our purposes,” Gresham said. “There are interesting things. Dan and I talked about early last year about the the fact that AI can interpolate voice well,. Actually being able to give commands to squad mates — that’s interesting. It’s not something that we’re going to implement anytime soon because of the compute issues, but that is interesting.”

Origins

He worked with March Capital Gaming with Gregory (Milken), and then 1am Gaming with Milken, Frank Liquido and now Bunting as well. The team has invested in 15 different gaming companies. But for the past four or five years as a VC, Gresham has finally decided to go back into game startups.

Bunting and Gresham started talking seriously about the game in early 2024. Gresham started a lot of the initial work in May 2024. It’s an original intellectual property.

“We actually started by looking at the market and seeing if there was a team going after this exact market in this way, and there simply wasn’t,” Gresham said. “There were plenty of independent studios in this segment. They had made hundreds of millions. But no major industry gorilla was going after the opportunity. So after chewing on the idea for about two months together, wee said this just has to be done, and no one’s doing it.”

Gresham gathered a team of recognizable veterans in the game shooter market, but Gresham isn’t revealing their names yet. The goal is to ship a game later this year on Steam in early access on the PC. The company may hire a few more people in the pre-launch stage.

“We’re going to be very, very quiet in terms of letting players know what the plan is and what the game is going to be like,” he said. “Pre-launch, we’re exploiting some IP and tech arbitrage that allows us to punch very, very far above our weight.”

The company will do some quiet testing in the summer, and likely announce the game around the same time.

“We’re going extremely hardcore milsim,” said Gresham. “We refer to it has Hydra for short. The name is Hydra plus tactical mushed together.”

I asked Bunting why he wasn’t joining the startup.

“Where I am right now in my career is I’m enjoying working with a lot of different game makers, which I never have had before, because it’s always been so narrowly focused on on Call of Duty,” Bunting said. “The VC thing for me has really been a way to empower the next generation of talent that’s going to be, founding studios and coming up with new ideas and releasing cool games.”

He sees it as a way to give back a bit, and he’s starting with Gresham’s company. Bunting considered starting his own studio, but he said, “It’s not what’s driving me right now. Lewis and I have a great partnership. We’re friends in addition to being business partners.”