The esports industry is poised for success, but what do investors think? Is the money flowing into esports to sustain its growth and bootstrap new ideas and applications?
The Biggest Esports Investments of 2019
With the rumble around the esports scene and a focus on big events with record-breaking prize pools, the funding and VC investment behind the scenes don’t get as much attention. As investors big and small look to enter a market with a lot of growth potential, it’s wise to follow the money to get a clearer picture of the uncharted territory.
The esports industry is one of the few ones that have yet to take off following the last decade’s technology-driven disruption, as its popularity rises with a generational shift. Whether it’s relatively small or larger amounts of money flowing in, esports managed to attract close to $2 billion in investments over 2019.
Investors look to take advantage of the trend and have committed resources to various endeavors, buying stakes in established esports organizations, building on-location facilities for enhanced performance or developing new infrastructure and applications for the gaming industry.
Below are highlighted some of the investments that involve high-profile names, organizations and the largest amounts of capital committed to esports in 2019.
Esports Organization Gen.G Raised $46 Million
Esports organization Gen.G raised $46 million in April 2019, with a list of prominent venture funds and high-profile investors as part of the funding round.
The round includes investment from Battery Ventures, Canaan Partners, SVB Capital, Stanford University, Conductive Ventures and New Enterprise Associates. Alongside these funds, actor Will Smith and former football player Keisuke Honda, as well as Dennis Wong and Michael Zeisser, were part of the seeding round.
The raised capital was earmarked for supporting the expansion of Gen.G’s global presence. The esports organization has teams in various esports leagues across the globe including US, China, and Korea. In addition to that, Gen.G aims to direct some of the funds towards sustaining its youth esports academy program and open a Los Angeles headquarters.
Gen.G owns the Overwatch League franchise Seoul Dynasty and competes under its main brand in League of Legends Champions Korea (LCK).
IGC Completes Acquisition of Optic Gaming Parent Company
In one of the largest acquisitions in esports, Immortals Gaming Club (IGC) took over Infinite Esports & Entertainment, the parent company of Optic Gaming and Houston Outlaws, in a transaction estimated to be around $40 million.
The transaction made IGC one of the world’s largest esports organizations, having under its wing four distinct and elite brands with a presence in both franchised esports leagues – League of Legends Championship Series and the Overwatch League.
Following the acquisition, Immortals Gaming Club will take control of all Optic Gaming rosters and their League of Legends Championship Series slot.
The combined company’s team holdings now include Overwatch League franchise Los Angeles Valiant, Optic’s Call of Duty World League team, League of Legends franchise, and Brazil’s flagship Counter-Strike: Global Offensive team MIBR.
While Optic’s League of Legends team finished the 2019 season as they started it, in 2020 the franchise will be competing under the Immortals banner. As one of the first high-profile team acquisitions in esports, it will be interesting to see how the fan base reacts and whether fans will follow the new brand.
PlayVS Completes $50 Million Series C
Startup PlayVS, which is building a platform for competitive esports targeting high school participants, raised a $50 million Series C in 2019. This investment round brought the company’s total funding to an impressive $96 million. The latest round was led by New Enterprise Associates, with participation from Battery Ventures, Dick Costolo and Adam Bain of 01 Advisors, Michael Zeisser, Dennis Phelps of Institutional Venture Partners, and Michael Ovitz, co-founder of Creative Artists Agency.
PlayVS aims to incentivize esports participation for high school players, which is already a popular group for fostering a healthy player base in traditional sports in the U.S. The PlayVS software is used by high school administrations as an all-in-one online portal to host esports leagues for students, track wins, losses and player statistics.
The funding should contribute towards accelerating its growth, with plans to double the company’s staff and expand the offerings of the PlayVS app.
Hiro Capital Launches Esports-Focused Fund
In October, London-based Hiro Capital announced the launch of a €100 million fund that will be used to foster the growth of esports in the UK and the EU. Hiro Capital saw a funding gap in the European esports market, which led to the creation of the €100 million fund.
Hiro’s fund strategy will be split between creative games studios and industry technology. The fund will generally invest at the post-seed stage, during the Series A and B. Hiro stated that it plans to back around 20 gaming-related startups in the UK and Europe.
At the helm of Hiro Capital there is an experienced entrepreneurial team consisting of several industry veterans, consisting of Games Workshop co-founder Ian Livingstone, Inspired Entertainment co-founder Luke Alvarez and Lovecrafts founder Cherry Freeman.
Industry Veterans Launch New $60 Million Venture
Mike Sepso and Sundance DiGiovanni, the co-founders of professional esports organization Major League Gaming (MLG), unveiled in October their new venture Vindex. Jason Garmise and Bryan Binder, founders of investment firm VineLight Holdings also join Vindex as co-founders.
The inception was announced with a $60 million Series A funding round along with the acquisition of production company Next Generation Esports (NGE). Vindex is advertised as a tech infrastructure provider that is focused on delivering enhanced experiences to esports fans. The venture also launched the turnkey esports operation company Esports Engine.
According to the announcement, Esports Engine is the same team that led MLG from its foundation in 2002 to its successful acquisition in 2016 by Activision Blizzard. Leveraging its extensive experience in the industry, the company will work with publishers, broadcasters, leagues, and teams by providing turnkey technology and services.
The $60 million Series A funding round was backed by investors in the hedge fund and private equity world. Major support came from prominent figures in the industry, like former ESPN CEO and current Activision Blizzard Media Networks Chairman Steve Bornstein, along with hedge fund Gotham Asset Management Founder Joel Greenblatt.
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