During the month of March 2021, The Esports Observer tracked 23 investments raised by esports-relevant companies. Disclosed investments amounted to $233M USD, bringing the total sum of disclosed investments in 2021 to $1.9B.
In addition to several significant investments, including Overwolf’s $50M+ and Envy Gaming’s 40M Series C financing rounds, several private placement deals by Toronto Stock Exchange Venture Exchange listed esports companies, and multiple seed round investments, a couple of major deals in the works came to light during the month. Super League Gaming is in the process of acquiring live streaming technology platform Mobcrush at a transaction value likely to exceed $60M and Microsoft is in talks to acquire gaming voice and community chat platform Discord for more than $10B.
Financial terms were not disclosed for all deals highlighted in this article.
Overwolf Raises $50M+ Series C
In-game apps platform Overwolf raised a $52.5M Series C financing round co-led by Griffin Gaming Partners and Insight Partners with participation from further investors including Ubisoft, Warner Music Group, Immortals Gaming Club investor Meg Whitman, Gen.G co-founder Kevin Chou, and existing investors Marker, Intel Capital and Liberty Media.
Tel Aviv-based Overwolf, revealed that it intends to use the funding to “boost development firepower dedicated to creating services for creators and to create more opportunities and vehicles to invest in, and with, the in-game creator community.”
Envy Gaming Secures Funding from a Publicly-Traded Television Broadcasting Company
Dallas-headquartered esports organization Envy Gaming raised a $40M Series C investment round led by American New York Stock Exchange (NYSE) listed broadcasting company Gray Television. As the lead investor, Gray Television committed $28.5M.
Gray Television joins Envy Gaming’s ownership group, including former professional Call of Duty player and Envy Gaming founder Mike Rufail, musician Austin Richard “Post Malone” Post, Texas Rangers minority owner Ken Hersh, and several Texas families and national investors.
PUBG Developer Invests in Indian Esports Firm Nodwin Gaming
India-based esports and gaming firm Nodwin Gaming secured a $22.5M (₹1.64B INR) investment from South Korean game developer and publisher Krafton Inc., which is best known as the owner and publisher of PUBG and PUBG Mobile.
The investment will be used to scale up in regions where it already has a foothold and expand beyond those borders. Those regions include South Asia, Africa, and the Middle East (with a focus on continuing to work from Dubai). It will also use the funds to continue to build out infrastructure and make improvements in its existing operations, and support talent.
Beyond expanding its footprint in and around regions where it already has a presence, Nodwin co-founder and managing director Akshat Rathee told The Esports Observer that this investment will allow the company to consider creating franchising models and to consider building out esports around “real sports” such as Cricket and soccer in India and other regions where the sports are super popular.
Funding for New Game Studios
Theorycraft Games, a new game development company founded by Riot Games, Bungie, Blizzard, and Valve Software veterans, raised $37.5M in a Series A funding round led by NetEase. Theorycraft will use the new capital in a recruitment push to fill out a team working on “a community-driven player versus player (PvP) game available across multiple platforms.”
Frost Giant Studios secured a $5M investment round for the continued development of an independent real time strategy game (RTS). The investment saw participation from Korean venture capital fund Kona Venture Partners as well as Global Founders Capital, RXBAR co-founder Jared Smith, and game backend entrepreneur Eden Chen.
Game Studio Acquisitions
Nasdaq-traded racing game developer, publisher, and esports ecosystem provider Motorsport Games fully acquired rFactor 2 developer Studio397 from Luminis International for $16M. The Netherland-based Studio397 is expected to retain its name, branding, and existing development and management team following the acquisition’s completion. Additionally, Motorsport Games plans to utilize its resources and expertise to enhance rFactor 2, amongst other things by using Epic Games’ Unreal Engine and layering in additional components Motorsport Games has developed over the last two years.
ByteDance, the owner of short video apps TikTok and Douyin, acquired Shanghai-based game developer and publisher Moonton through its gaming business subsidiary NUVERSE. The company which is best known for its mobile multiplayer online battler arena (MOBA) game Mobile Legends, will remain an independent developer while using ByteDance’s resource to expand overseas.
Fortnite and Unreal Engine maker Epic Games acquired Tonic Games Group, the developers of the popular battle royale party game, Fall Guys: Ultimate Knockout. Tonic Games joins Epic’s other wholly-owned studios including Rocket League developer Psyonix, Chair Entertainment, and People Can Fly.
Private Placements
Toronto Stock Exchange Venture Exchange (TSXV) listed Engine Media Holdings closed a $15M private placement. Engine Media owns several esports, gaming and news assets, including gaming video distribution analytics platform Stream Hatchet, racing game developer Eden Games, and esports tournament platform UMG. The group’s CEO Louis Schwartz revealed in a release that the new capital will be used to invest into the company’s subsidiaries and capitalize on “numerous growth opportunities in front of us.”
GameSquare Esports, the Canadian Securities Exchange-listed parent company of esports agency Code Red Esports, completed its acquisition of Canadian esports organization Reciprocity. GameSquare fully acquired Reciprocity for a consideration of approximately $14.44M CAD ($11.57M). Furthermore, the completion of the Reciprocity acquisition satisfied the escrow release conditions of a previously announced upsized bought deal private placement raised by GameSquare. Therefore, the company got access to the $7M CAD ($5.6M) raised.
Toronto Stock Exchange Venture Exchange (TSXV) listed Real Luck Group, the parent company of esports betting platform Luckbox, raised approximately $17.8M CAD ($14.1M) in an oversubscribed private placement deal. The company intends to use the private placement net proceeds for working capital and general corporate purposes such as investing in its existing team and scaling user acquisition.
Seed Round Investments
Swiss esports organization Ovation eSports AG raised a seed round investment from twin brothers Maurice and Kyril Louis-Dreyfus towards growth and expansion. The Louis-Dreyfus brothers, who were born in 1997, are members of the French Louis-Dreyfus family and children to the late Robert Louis-Dreyfus, a former CEO of adidas and majority shareholder of the French soccer club Olympique de Marseille. In February, Kyril Louis-Dreyfus acquired a majority stake in the English third-tier soccer club Sunderland A.F.C.
San Francisco-based mobile gaming platform company Ryu Games raised a $2.3M seed round led by Velo Partners, Citta Ventures, MGV Capital, INP Capital, Side Door Ventures, and 500 Startups. The startup intends to use the capital infusion to accelerate the growth of its mobile cash tournament gaming platform.
Tech startup 1v1Me raised a $2M pre-seed financing round to launch its online gaming wagering platform from investors, including On Deck, AngelList Access Fund, Sterling.VC, Lightshed Ventures, and BettorCapital. The startup was founded last year by Anthony Geranio and Alexander Emmanuel, who met working at Skillshare, inspired by their friends playing video games for money using a whiteboard for stats and leaderboard tracking during the COVID-19 pandemic.
California-based tech startup Esports GG Inc, the developer of interactive esports and gaming fan platform Organization.GG, secured a $610K pre-seed funding round from WePlay Esports, QPDigital, and private investors. The funding will be used to expand into the North American market and further develop the Organization.GG platform.
Teneriffe-based tech startup Teide Innovation Technologies, the developer of esports training solutions eStragy, closed a €84K EUR ($99K) pre-seed funding round led by business angel Hugo Borges de Sousa. The startup intends to use the investment proceeds to strenghten its financial structure for its official launch in May.
Other Acquisitions
The annual fighting game tournament brand Evo got acquired by Sony Interactive Entertainment and RTS, a new esports venture backed by a group of investors including entertainment company Endeavor, through a joint venture partnership.
Chinese esports solutions company VSPN (Versus Programming Network) acquired Chinese live streaming talent agency Famulei. Following the acquisition, Famulei will operate as an independent brand under VSPN, operating in live streaming talent management, marketing sponsorship, licensing, and e-commerce operations. In the Chinese esports live streaming business, Famulei has partnered with T1 Entertainment & Sports, Team Liquid, and Gen.G Esports, as well as famous esports players and streamer Lee “Faker” Sang-hyeok, Samu “Sambty” Kauppinen, and Júlia “Mayumi” Nakamura.
Gaming and esports entertainment and media company ReKTGlobal acquired the social media monetization and talent development company TalentX Entertainment. Previously, ReKTGlobal had created a joint venture with TalentX as its talent management arm as a separate entity. The merger now brings them together under the same ownership group.
Other Investments
California-based interactive live streaming platform Maestro Interactive secured a $15M Series B financing round from investors including NetEase, Sony Music Entertainment, Acronym Venture Capital, Stadia Ventures, Twitch co-founder Kevin Lin, former Activision Blizzard executives Michael and Amy Morhaime via Moonwell Capital, and several existing investors. Maestro revealed that it intends to use the investment proceeds to finance the value-chain expansion of its products and further diversify its customer base. According to a release, Maestro more than tripled its revenue in 2020 and grew its staff fivefold in the last six months.
Brooklyn Nets player Kevin Durant and Rich Kleiman joined Andbox, the New York-based esports organization behind the New York Subliners of the Call of Duty League and the New York Excelsior franchise of the Overwatch League, as investors thought their investment vehicle Thirty Five Ventures. As part of the deal, Durant and Thirty Five Ventures will look to be active partners across a range of initiatives between the two, which will include creating new entertainment content and designing new merchandise collections.
San Francisco-based tech startup Lowkey raised a $7M Series A financing round from investors including Silicon Valley-based venture capital firm Andreessen Horowitz. The company, which currently employs eight people, was created by Harvard graduate Jesse Zhang to build a software solution to capture gameplay videos on desktop, which can be edited and shared on mobile in a social format popularized by apps such as TikTok.
The Indian Gaming League (IGL) parent company, House of Gaming Pvt. Ltd., raised a $500K strategic investment from digital entertainment company Hungama and movie and digital content production company Hindustan Talkies. The Mumbai-based startup intends to use the investment proceeds to acquire new users and develop additional features to increase user engagement on its tournament platform. Furthermore, IGL will use some of its fresh capital to launch its Indian Gaming League Championship Cup inaugural season.
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Source: https://esportsobserver.com/march-2021-investment-recap/
