April marks the third of four months this year, in which The Esports Observer tracked less than ten investments disclosed during the month. In April, esports relevant companies disclosed $712.1M USD raised in investments. This brings the total sum of disclosed investments in 2020 to $873.74M.
The low number of investments highlights the issue of financial bottlenecks for startups in the ecosystem during the ongoing global pandemic (COVID-19). Furthermore, $662.6M or 93% of the amount invested during the month is accounted for by large stock-listed Chinese live streaming companies.
Financial terms were not disclosed for all deals highlighted in this article.
FaZe Stacks Celebrity Investors
In April, esports organization FaZe Clan disclosed a $40M Series A investment, which was initiated in late 2018 and closed in December 2019. The financing round was led by entrepreneur and record executive Jimmy Iovine and the team at NTWRK, an e-commerce and culture platform. Furthermore, several entertainment industry professionals and sports athletes participated in the round.
Since raising the $40M Series A investment, FaZe Clan secured a $22.7M convertible loan and is currently working on a small Series B financing round.
Additional Funds for Chinese Live Streaming Platforms
Tencent Holdings exercised an option to acquire additional shares in live streaming platform Huya to increase its voting power in the company to 50.9%, which Tencent obtained when it invested $462M in a Series B funding round in March 2018. Tencent acquired roughly 16.5M additional shares of Huya for an aggregate purchase price of approximately $262.6M in cash from Huya’s previous owner, Chinese social media platform YY.com parent JOYY.
Tencent is also the largest shareholder in Huya’s biggest competitors, live streaming platforms DouYu and Bilibili, the latter of which secured an additional shareholder in April.
Sony subsidiary Sony Corporation America invested approximately $400M in Bilibili by subscribing to roughly 17M newly issued shares of Bilibili. Consequently, Sony now owns approximately 4.98% of Bilibili’s total issued shares. Additionally, the two companies are looking to pursue collaboration opportunities within the area of the entertainment business in the Chinese market, including anime and mobile games.
Financing Rapid Growth Startups
Chat platform developer Guilded raised a $7M Series A financing led by private equity investment firm Matrix Partners. Further investors that participated in the round included Initialized Capital, Susa Ventures, and Sterling.VC. Guilded plans to use the new capital to grow its team, further develop its product, and forge partnerships with game developers and publishers as well as with esports organizations.
Esports and gaming agency META raised a €1M EUR ($1.09M) investment to support the company’s growth. Investors that participated in the financing round included several executives from Benelux-based enterprises and a few celebrities, such as Belgian DJ’s “Dimitri Vegas & Like Mike” (a duo composed of the brothers Dimitri and Michael Thivaios) and Felix “Lost Frequencies” De Laet.
Esports apparel company Raven secured a $1.4M seed investment with a US-based private equity fund. The company is now looking to expand its team in Europe and North America, while further developing the company’s service offering across product design, manufacturing, marketing, and logistics.
Strategic Acquisitions
Riot Games acquired game developer Hypixel Studios, which was founded by Simon Collins-Laflamme and Philippe Touchette, who created the Hypixel Network, a Minecraft minigame server in 2013, which is now managed by Hypixel Studios and reached 18M unique players in April. The studio will continue working as an independent operation while leveraging Riot Games’ technology, resources, and expertise.
Sim-racing-focused company Torque Esports acquired the U.K.-based Formula 1 and motorsports coverage brand WTF1 from Dennis Publishing to expand its motorsport-themed media operations. The acquisition of WTF1 complements the recent launch of Torque’s motorsport news brand asset “The Race.”
Danish gaming peripherals manufacturer SteelSeries agreed to acquire French 3D gaming sound solutions developer A-Volute, which is best known for its audio software Nahimic. Through the acquisition of the company and its engineering team, SteelSeries is looking to improve its gaming software platform.
