For the second month in 2020, The Esports Observer tracked less than $30M USD in disclosed investments for the month. In March, esports relevant companies raised $22.24M in disclosed investments through 11 closed investment rounds. This brings the total sum of disclosed investments in 2020 to $161.64M.
Due to the current global outbreak of the novel coronavirus (COVID-19), raising investments became increasingly difficult for companies in the esports ecosystem. Several companies, such as Team Reciprocity, reported that investment negotiations had been put on hold for the time being. Presumably, this will become a major challenge for the esports ecosystem as liquidity is essential for many companies to endure an economic crisis and the need for short-term financing will increase significantly. A few companies already resorted to other means of securing liquidity, such as laying off staff and dropping teams.
Financial terms were not disclosed for all deals highlighted in this article.
LVLing Up Gaming and Esports Community Venues
Berlin-based VERITAS Entertainment raised a $10M financing round from investors, including BITKRAFT Esports Ventures, to fund the construction and operation of its first gaming and esports community center LVL and initial exploration into other markets. The 2,500m²+ (+26,000ft²+) center will be located at Checkpoint Charlie in Berlin, where it is expected to host 130 live events annually accommodating 250K visitors per year. Initially, the opening to the public was planned for March 26 but postponed to a yet-to-be-announced date due to the ongoing global health crisis.
The venue has 11 commercial partners supporting it and will serve as G2 Esports’ central venue and training ground, where its players and teams will be able to bootcamp, create content, and interact with fans.
New Studio, Old Assets
Mobile gaming company Bazooka Tango raised a $2.5M seed funding led by BITKRAFT Esports Ventures, with Modern Times Group (MTG), Mergelane, and others participating. Bazooka Tango was founded in March 2019 by two game industry veterans who previously co-founded Vainglory maker Super Evil Megacorp.
Bazooka Tango’s first title, Vainglory All Stars, will be developed in partnership with Super Evil Megacorp as the developer will use the company’s proprietary E.V.I.L. game development engine, IP, and universe to try and bring an all-new Vainglory experience to market quickly and cost-effectively. The title is expected to soft launch this Spring.
In addition to its partnership with Super Evil Megacorp, Bazooka Tango stated that it also works on creating “new original IP titles to establish a portfolio that features a mix of games in successful mobile genres, mobile adaptations of hit PC and console genres, novel cross-genre ‘remixes,’ and ambitious genre-defining titles.”
Teaming Up With Strategic Investors
Hamburg-based esports organization Unicorns of Love raised an investment from Hamburg-born businessman and investor Tomislav Karajica. The investment is made by Karajica’s real estate and project development company Home United, which is also the owner of Austrian soccer club SK Austria Klagenfurt and investor in German fourth division soccer club FC Viktoria 1889 Berlin. As part of the partnership, the parties will create an esports space in the Home United-owned coworking space Hamburg Ding at Nobistor in Hamburg’s popular neighborhood St. Pauli.
Mobile-focused esports organization Tribe Gaming raised over $1M in a seed investment round. Participants in the financing round included Boston Celtics player Gordon Hayward, Super Evil Megacorp CEO Kristian Segerstrale, World Wrestling Entertainment (WWE) performer Claudio “Cesaro” Castagnoli, and angel investor Victor Krahn. Proceeds from the investment will be used to support the team’s general expansion plans over the next few years in addition to the short-term creation of a new headquarters and a content creator lab specifically designed for mobile gaming and entertainment in Austin, Texas.
Flamengo eSports parent, North American esports organization Simplicity Esports, secured a $500K investment from student-run fund manager TRITON FUNDS to serve as working capital to “support the achievement of Simplicity Esports’ previously stated goals of owning a team in a franchised game, broadening its offering of competitive events, including play-at-home online tournaments, and being cash-flow positive.”
Funding for Tournament Organizers
Rally Cry raised $1.2M in seed financing from a group of several industry veterans and other investors to establish its newly founded business. Participants in the round included Mike Morhaime (Blizzard Entertainment co-founder), Amy Morhaime (former Blizzard Entertainment vice president of global esports), Kevin Lin (Twitch co-founder), Marc Merrill (Riot Games co-founder), Vincent Francoeur (former Blizzard Entertainment head of web and mobile), Andy Hyltin (CNL Holdings vice-chairman), Rich Newsome (partner at Newsome Law), and Paul Mears (Hello! Destination Management president).
Singapore-based esports tournament and media network company Esports Players League (ESPL) received a $1M seed investment led by venture capital firm 500 Startups. The mobile-focused company plans to use the financing to launch its first tournament series.
Canadian esports company Amuka Esports acquired two companies during March: Incendium Gaming and EZY Mode. The acquisitions of Incendium Gaming, a tournament organizer for fighting games, and EZY Mode, a small esports venue in Windsor, Ontario, are part of Amuka’s mission to grow niche gaming communities.
Streaming technologies developer Genvid Technologies expanded its Series B financing, in which the company initially raised $27M in November 2019 by closing an additional $6M in funding from strategic investors, including NTT Docomo Ventures, Samsung Ventures, and Huya. The $33M Series B investment increased Genvid’s total amount raised to date to $53M.
SCUF Gaming’s acquisition by EagleTree Capital-owned gaming peripherals and PC components manufacturer CORSAIR was completed on March 3.
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