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On Tuesday, the year 2019 came to a close, and with it a year in which The Esports Observer tracked $1.95B USD in esports investments. While this is a decrease from the previous year in which we tracked a record sum of $4.52B, $1.9B of that sum is attributed to disclosed investments made by Tencent Holdings throughout 2018. In comparison, the company only invested $40M in disclosed esports transactions during 2019.
July featured 2019’s highest investment sum of disclosed investments at $557M. Furthermore, during the stretch of September to November, each month saw esports investments totaling more than $200M per month. For the remaining months, The Esports Observer tracked a sum of anywhere between $40M to $100M each month.
For this article, we listed the top ten esports investment by disclosed transaction amounts.
#10 100 Thieves Collect $35M Series B
Esports organization 100 Thieves secured a $35M Series B funding round led by growth investment firm Artist Capital Management, with its chief investment officer Josh Dienstag joining 100 Thieves’ board of directors. Another participant in the round was Aglaé Ventures, whose parent company Groupe Arnault is the controlling shareholder of Louis Vuitton Moet Hennessy (LVMH).
Following the investment, 100 Thieves announced plans to establish a 15,000-square-foot Los Angeles headquarters and training facility, which will include streaming stations and content production capabilities, as well as an apparel design workshop. The facility will also include a retail storefront for 100 Thieves-branded lifestyle apparel.
#9 Tencent Acquires Controlling Stake in Supercell
Chinese multinational investment holding conglomerate Tencent acquired a majority equity voting stake in a consortium that itself holds a majority stake in Finnish mobile developer, Supercell. The company acquired an additional 44,000 shares in the consortium called Halti via a $40M convertible bond, thus increasing its stake from 50% to 51.2%. The consortium was founded in June 2016 as a Luxembourg Société Anonyme solely to acquire Supercell, and it indirectly holds an 81.4% stake in the developer. According to the filing, the consortium is now a subsidiary of Tencent.
#8 Comcast and SK Telecom Launch Joint Venture: T1 Entertainment
U.S. sports and entertainment company Comcast Spectacor and Korean telecommunications firm SK Telecom launched a joint esports venture, T1 Entertainment & Sports (T1). The company launched with multiple esports teams based out of South Korea and the U.S, including three-time League of Legends World Champion team SKT T1. The joint venture will be 54% owned by SK Telecom, 34% by Comcast, and the remainder by Highland Capital—the latter two to invest a combined $41M cash into the business.
#7 Gen.G Raised $46M from Investors Including Will Smith
Esports organization Gen.G raised $46M from investors, including several prominent Silicon Valley funds and high-profile individuals such as LA Clippers minority owner Dennis Wong and actor Will Smith. The team stated it will use the funding to launch a youth academy program, open a team headquarters in L.A. this summer and further expand into new games and regions. Gen.G owns the Overwatch League franchise Seoul Dynasty and competes under its main brand in the League of Legends Champions Korea (LCK).
#6 High School Esports Organizer PlayVS Completed $50M Series C Funding
Software startup PlayVS, which is building a platform for competitive esports experiences focusing on high school esports, raised a $50M Series C led by return investor, New Enterprise Associates, with participation from Battery Ventures, Dick Costolo and Adam Bain of 01 Advisors, Michael Zeisser, Sapphire Sport, Dennis Phelps of Institutional Venture Partners, and Michael Ovitz, co-founder of Creative Artists Agency. The investment brings the company’s total funding to $96M.
#5 Vindex Launched with an Initial Funding of $60M
Vindex launched with initial funding of $60M to build a global esports infrastructure platform.
The fund was established by esports industry veterans Mike Sepso and Sundance DiGiovanni, co-founders of Major League Gaming (MLG), as well as Bryan Binder and Jason Garmise, fintech entrepreneurs and private investors. The $60M Series A financing round was backed by investors from the hedge fund and private equity sphere.
Additionally, the company made the acquisition of Next Generation Esports (NGE) and the launch of Esports Engine (both companies in esports operations, production, and technology) public.
#4 Hiro Capital Launched a $110M Games, Esports, and Digital Sports Fund
Hiro Capital launched a €100M ($110M) venture capital (VC) fund to back innovators in the European Union (EU) and United Kingdom (UK) games, esports, and digital sports ecosystem.
The fund will generally invest at the post-seed stage, at Series A and B. Hiro Capital is led by an entrepreneurial founding team consisting of ten industry veterans including Luke Alvarez (managing partner), a former co-founding CEO & President of Inspired Entertainment, a Nasdaq-listed mobile games and virtual sports technology company as well as a co-founding non-executive of The Cloud Network; Ian Livingstone (partner), a co-founder of Games Workshop and former chairman of Eidos, the publisher of Tomb Raider; Cherry Freeman (partner); Simon Cornwell (non-exec investment director); Thomas Martens (DACH & sports venture director); and Alistair Hopkins (technology venture director).
#3 RedBird Capital Invests $125M to Establish OneTeam
The National Football League Players Association (NFLPA), the Major League Baseball Players Association (MLBPA), and RedBird Capital Partners launched OneTeam Partners, LLC, a company to help athletes maximize the value of their name, image, and likeness rights.
RedBird Capital made a capital investment of $125M and will own a roughly 40% stake. Furthermore, the firm will be contributing financial and operational expertise. The NFLPA and MLBPA own the other approximately 60% stake and will be contributing exclusive group rights, operational expertise, and personnel. OneTeam is also in talks with other U.S. players’ unions and could eventually expand internationally.
#2 100 Thieves Investor Created the $100M Artist Esports Edge Fund
Investment management firm Artist Capital Management LLC raised $100M to establish its first fund, the Artist Esports Edge Fund. With the Esports Edge Fund, the firm seeks to provide institutional investors with exposure to esports companies.
The Artist Esports Edge Fund’s current investments include 100 Thieves, a Los Angeles-based lifestyle brand and esports organization; Washington Esports Ventures, owner of the Washington Justice team in the Overwatch League; as well as undisclosed chatting and viewing apps in the ecosystem.
With a ten-year duration of capital, the Esports Edge Fund has the possibility to partner with esports companies for the long term. In July 2019, the Esports Edge Fund led 100 Thieves’ $35M Series B, and Josh Dienstag, chief investment officer of Artist Capital, joined 100 Thieves’ board of directors.
In addition to the funds going towards the Esports Edge Fund, the firm also raised $35M of incremental capital from its undisclosed limited partners in separate co-investment vehicles. Those funds were all deployed in 2019 to further support Esports Edge Fund portfolio companies.
#1 Chinese Live-Streaming Platform DouYu Went Public on the Nasdaq
In July, Chinese live-streaming service DouYu went public, raising $517M in the offering on the Nasdaq Stock Market. DouYu sold 67.39M American depositary shares at $11.50 each, with the initial public offering (IPO) valuing the company at nearly $4B, including restricted shares issued to employees as compensation. In total, the IPO raised $775M, of which one-third came from shares sold off by existing investors.
DouYu notes that the company planned to use 35% of its IPO proceeds to expand out its content portfolio (including esports content); 30% for research, development, and technology, 15% for marketing; and 20% for working capital and potential investments and acquisitions.
Chinese multinational investment holding conglomerate Tencent Holdings, which invested $632M in the company in March 2018, remains the single largest shareholder in DouYu with a 37.4% stake.
Honorable Mentions:
While the transaction amount of this acquisition was undisclosed, the OpTic Gaming and the Houston Outlaws parent company Infinite Esports & Entertainment acquisition by Immortals Gaming Club is one of the biggest esports organizations acquisitions to date. OpTic’s League of Legends Championship Series (LCS) team will rebrand as Immortals in 2020. Immortals Gaming Club sold the Houston Outlaws to Beasley Media Group, as it already owns the OWL franchise Los Angeles Valiant.
Another important acquisition that took place in 2020 was the acquisition of Rocket League developer Psyonix Studios by Epic Games, the company behind Fortnite. In a statement on the Rocket League website, Psyonix stated that Rocket League will eventually be added to the recently-launched Epic Games store.
Editor’s note: For the sake of clarity on Entry #3 in our list; it is tangentially related/impacts the esports industry because the two players associations earn roughly $120M in combined annual revenue from licensing deals with companies including Madden NFL publisher Electronic Arts and MLB The Show publisher Sony, as detailed in this article.
