June marks only the second month this year in which The Esports Observer tracked 10 or more investments disclosed during the month. In June, esports relevant companies disclosed $196.85M USD raised in investments, bringing the total sum of disclosed investments in 2020 to $1.12B.
While the esports industry is still recovering from the impact of the COVID-19 pandemic, investments started to ramp back up in June. Prominent headlines included David Beckham venturing into esports, Fortnite developer Epic Games seeking to raise three-quarters of a billion dollars, and South Korean company BRION E-Sports partnering with several celebrity investors to apply for the upcoming League of Legends Champions Korea franchising.
Financial terms were not disclosed for all deals highlighted in this article.
In the wake of its global launch, British esports organization Guild Esports announced professional soccer player David Beckham as co-owner, who is invested via DB Ventures. Beckham’s investment company took part in an ongoing financing round in which Guild Esports targets to raise $31M at a $124M valuation.
Existing investor Blue Star Capital, which initially invested $186K just after Guild Esports was founded in late 2019, also participated in the current financing. Blue Star Capital made use of its anti-dilution rights attached to its initial investment and invested a further $596K to maintain its 11.7% shareholding stake.
Funding a Boom in Tournament Tool Demand
Tournament tool developer BoomTV raised a $10M Series A financing round led by BITKRAFT Esports Ventures. In total, seven investors participated in the investment, including PTW, Tandem, and Crosscut Ventures. The company plans to use the investment’s proceeds to apply an aggressive investment strategy to its two main products, the Code Red series and its tournament organization platform.
In an interview with The Esports Observer, BoomTV CEO and Co-Founder Sumit Gupta explained the company’s shift from developing a 3D-focused esports streaming technology to an all-in-one tournament organization platform and its investors’ support in doing so.
Preparing a Bid for an LCK Franchise
Parent company of South Korean esports team hyFresh Blade, BRION E-Sports secured investment from musician Kim Hee-Chul and several sports celebrities, including sports shooter Jin Jong-oh (who is managed by the investee’s parent company BRION Sports Business Group) and baseball players Park Yong-taik and Kim Tae-kyun.
BRION E-Sports plans to acquire a franchise slot in the LCK when the league transitions into a long-term partnership model next year. Franchising fees for successful applicants will be $8.2M for existing teams, while newcomers could be required to pay a fee between $10M to $12.3M. Currently, hyFresh Blade competes in the tier two league Challengers Korea.
Funding Competition Growth
Japanese esports content provider PlayBrain closed a $6M Series A financing round, bringing the company’s total funds raised to $8M. Existing investor BITKRAFT Esports Ventures participated in the financing round. PlayBrain revealed that it plans to use the proceeds to grow its footprint, expand into additional esports and entertainment properties, and strengthen its commitment to leading the creative direction, operation, and commercialization of League of Legends Japan League.
Singapore-based sports media company Group One Holdings raised a $70M investment. The company specializes in mixed martial arts entertainment but entered into a joint venture with the Japanese advertising agency Dentsu to launch ONE Esports in late 2018. When ONE Esports was first launched, ONE Championship announced its plans to lead up to $50M of investments alongside other key partners into ONE Esports.
Philadelphia-based esports infrastructure company Nerd Street Gamers received a $5.4M convertible note in the lead-up to a Series B financing round to support its rapid growth through 2020 and beyond. The company targets to raise a total of $35M by the end of the year. Participants in the investment included existing investors T1 co-owner Comcast Spectacor, discount store chain Five Below, as well as venture capital firms Elevate Capital and SeventySix Capital.
Gaming Tech Investments
Messaging and VoIP platform Discord received a $100M investment led by Index Ventures. The investment values the company at $3.5B, up from a $2.05B valuation during the company’s last $150M fundraising in December 2018. Discord, which currently has more than 100M monthly active users and 6.7M active servers, plans to support its products, community, and company with the investment’s proceeds.
Portuguese technology startup Replai raised a $1.35M seed investment led by early-stage venture firm Bright Pixel. Further investors that participated in the financing round included early-stage investment firm Ideias Glaciares, online advertising company Clever Advertising, alongside several business angels. The company intends to use the investment proceeds for business development, hiring new talent, and international expansion.
In-game apps platform Overwolf acquired add-on and modification management system CurseForge from Amazon-owned streaming platform Twitch. Overwolf plans to detach CurseForge from the Twitch client and distribute the software as a standalone desktop app instead. Furthermore, the company stated that it “has pledged to pay CurseForge mod authors 50% more by 2022, while not disrupting their current revenue streams.”
Other Investments
Isle of Man-based esports betting platform Luckbox completed $3.3M investment in two tranches. The investment was completed in connection to Esports Limited’s plans to go public on the Toronto Stock Exchange Venture Exchange (TSXV), a marketplace for emerging companies. In May, the Luckbox group signed a non-binding letter of intent with the capital pool company (CPC) Elephant Hill, a TSXV-listed shell company through which private companies can go public, to be acquired by the company.
Esports and media organization FaZe Clan acquired a stake in New York-based dietary supplements company CTRL Holdings LLC. CTRL, which stands for Catered to Real Life, was founded by Major League Gaming Co-Founder Sundance DiGiovanni, former professional gamer and Team Envyus Founder Skyler Johnson, and entertainment executive and attorney Glenn Delgado, who previously served as general counsel for Major League Gaming. The brand sells a line of powdered meal replacement shakes.
Esports organization Beastcoast joined Techstars’ Sports Accelerator Program. As part of the partnership, Beastcoast will receive additional growth capital as well as mentorship from sports and media executives and business development resources to support the team’s scaling.
Investments in the Making
Fortnite and Unreal Engine maker Epic Games is close to raising a $750M investment round at a company valuation of approximately $17B. Reportedly, existing investor Kohlberg Kravis Roberts & Co. (KKR & Co.), and new investors T. Rowe Price Group and Baillie Gifford will participate in the financing round.
Los Angeles-based esports organization eUnited entered into a merger agreement with TSXV-listed mobile entertainment and marketing company Backstageplay, which would result in a reverse takeover of Backstageplay. Simultaneously, with the merger’s closing, the company is looking to conduct a private placement investment to raise a minimum of $2.2M in gross proceeds.
Source: https://esportsobserver.com/june-investment-recap-2020/