October Investment Recap: Financing Esports Competitions in China and Fresh Capital for Teams
The Esports Observer tracked 13 investments raised by esports-relevant companies during the month of October. Disclosed investments accumulated to $215M USD, bringing the total sum of disclosed investments in 2020 to $6.13B.
Financial terms were not disclosed for all deals highlighted in this article.
China’s Biggest Esports Organizer Raises $100M
With a total esports audience three times as big as the U.S. esports audience, China currently is the biggest esports market. One of the key players in that market is Chinese esports solutions provider VSPN (Versus Programming Network), which according to its own statement, is “partnered with over 70% of Chinese esports tournaments.” To financially support its plans of increasing its footprint in the ecosystem, VSPN raised a close to $100 million Series B financing round led by Tencent. Investment management firm Tiantu Capital, trading firm Susquehanna International Group, and video-sharing app developer Kuaishou also participated in the investment round.
Shanghai-based VSPN was founded in 2016 and began hosting one of China’s most important mobile esports competitions, the Arena of Valor King Pro League (KPL), in September of the same year. In January 2017, the company closed an investment led by Focus Media and expanded into building and operating esports venues, the first one opening in Shanghai in July 2017. By now, VSPN has more than 1,000 employees, partners with several premier leagues and tournaments, runs an esports content production business, and operates branded esports venues in Chengdu, Xi’an, Shanghai, and Seoul.
VSPN intends to use the investment proceeds to improve its esports products, continue building a diverse esports ecosystem, and increase its reach. Furthermore, Tencent’s investment will likely open further doors for VSPN in the company as Tencent has more stakes in the esports ecosystem than any other company; for example, owning the League of Legends developer Riot Games. In cooperation with its new investor Kuaishou, VSPN aims to build an esports short-form video presence to diversify its current content creation and distribution strategy.
Esports Network VENN Raises Additional Funds
The Video Game Entertainment and News Network (VENN) raised a $26M Series A investment round co-led by BITKRAFT Ventures and Nexstar Media Group. Further investors that participated in the investment include Eldridge, Minnesota Røkkr parent WISE Ventures, Alumni Ventures Group, and the majority of the company’s existing seed investors.
As part of the investment deal, Nexstar secured the right to appoint a member to VENN’s board of directors and exclusive rights to broadcast VENN for local TV. Bringing on Nexstar, which is one of the largest U.S. broadcast companies running 197 television stations, will enable the network, which started out in streaming on platforms such as Twitch, YouTube, Facebook, and Twitter, to move some of its shows to linear TV.
New Competition in the Real-Time Strategy Games Market
Independent game development studio Frost Giant Studios raised a $4.7M seed investment led by BITKRAFT Ventures. Further investors who participated in the financing round include 1 Up Ventures, GC Tracker, Riot Games, and Griffin Gaming Partners.
Frost Giant Studios was founded by former StarCraft II production director Tim Morten and WarCraft III lead campaign designer Tim Campbell earlier this year. In addition to Blizzard Entertainment veterans Morten and Campbell, a group of other veterans from Blizzard’s real-time strategy team across art, design, and engineering joined the new game studio. The studio set out “to bring real-time strategy (RTS) games to a broader audience by lowering the barrier to entry, enhancing co-operative gameplay, expanding the legacy of competitive esports, and empowering user-generated content.”
Investments in Esports Organizations
Hong Kong-based esports organization Talon Esports completed a $2M seed financing round led by the Korean Hana Digital Transformation Fund. The organization revealed that it will use investment proceeds to fund its expansion into new countries and game titles as well as explore lifestyle and fashion opportunities. The organization’s League of Legends team signed a partnership with French soccer team Paris Saint-Germain Football Club prior to the Pacific Championship Series (PCS) Summer Split 2020 and rebranded to PSG Talon.
EVOS Esports parent company Attention Holdings raised a $12M Series B investment round led by Korea Investment Partners. Further investors who participated in the financing round include existing investor Insignia Ventures Partners and Mirae Asset Ventures, Woowa Brothers, Indogen Capital, and several family offices across Southeast Asia and Japan.
Brazilian esports company and parent organization of the Brazilian League of Legends Championship (CBLoL) franchise Rensga Esports, Go Gaming, raised an undisclosed Series A investment from Componente, the investment vehicle of Brazilian businessman João Paulo Diniz. Go Gaming will have to pay a R$4M BRL ($710K) fee for Rensga’s CBLoL slot. The company is also looking to use parts of the investment proceeds to improve the team’s training facilities.
Esports organization XSET added musician Khalif Malik Ibn Shaman Brown, who is professionally known as Swae Lee, as an investor. The deal marks Brown’s second esports investment after his participation in FaZe Clan’s $40M Series A financing round in April 2020. XSET was founded in July 2020 by a group of three former FaZe Clan executives and Framerate founder Marco Mereu.
U.S. esports organization Ghost Gaming was acquired by a group of Atlanta-based investors, which are planning to relocate the organization’s headquarters to Alpharetta, Georgia, just outside Atlanta, from Irvine, California. Phoenix Capital Ventures Managing Partner Andrew Steinberg and Skillshot Media CEO Todd Harris led the new ownership group.
Australian Securities Exchange (ASX) traded esports media and software company Esports Mogul received binding commitments to raise $8M AUD ($5.75M) in an oversubscribed share placement. The company revealed the intention to use the investment proceeds to “support continued innovation of Mogul’s tournament platform, accelerate monetization strategy around brands, further international partner expansion, and continuing to secure partnerships with PC and mobile game publishers.”
Digital fundraising platform Tiltify secured a $6.5M Series A financing round led by Pace Capital. The company’s primary business is working with celebrities and gaming content creators to raise money for charitable causes. The investment brings Tiltify’s total funds raised to almost $9M. Tiltify, which according to its own statement is set to exceed a total of $100M raised for its charity partners by the end of this year, revealed that it intends to use the investment proceeds to “further fuel Tiltify’s ability to go beyond traditional fundraising, serving the next generation of socially-conscious consumers.”
Japanese esports management company RELATION X secured a strategic investment from talent agency group Gushcloud International. As part of the deal, all esports players of RELATION X, which was founded in February 2020, will be exclusively represented by Gushcloud’s subsidiary Gushcloud Japan.
Atlanta-based gaming platform and marketplace Shotcall raised a $2.2M seed investment led by Initial Capital and New Stack and closed by Lerer Hippeau. Shotcall revealed that it will use the investment proceeds to grow its marketplace platform to integrate with more game publishers and to expand hosting opportunities with more celebrities and artists.
Swedish esports competition platform G-Loot secured a kr500M SEK ($56M) financing round that increases the company’s pre-money value to roughly $143M. Investors that participated in the investment include Club Network Investment (CNI), Inbox Capital, and Swedbank Robur, which previously led a kr230M ($26M) financing in March 2019. it will use a part of the investment proceeds to “expand its service across gaming platforms and create a strong, global brand.“