AGORACOM Small-cap Investor Relations Blog

• February was an exceptional month for esports investments and acquisitions.
• Esports Observer recorded over $200M in transactions from major players in the industry such as Tencent, ESL, TPG Growth, and CAA’s Evolution Media.

Tencent Continues to Expand its Esports Footprint

In February, the Chinese tech giant expanded its gaming portfolio by acquiring stakes in the Shanghai-based Shanda Games and the South Korea-based Kakao Games. While the first deal did not disclose a sum, the investment round in Kakao totaled 140 billion won (roughly $130 million), 50 billion of which came directly from Tencent. In esports, Kakao’s largest impact has been managing the Korean servers for Bluehole’s PLAYERUNKNOWN’S BATTLEGROUNDS. Notably, the two companies have had an existing partnership that stretches back to 2013.

Indian Esports Are on the Rise

Early in February, ESL acquired a minority stake in Indian mobile game publisher Nazara Technologies and wasted no time in further expanding their footprint in the burgeoning market. Nazara recently acquired NODWIN Gaming, who through this deal now has the license to operate ESL’s events in the country through 2023.

Additionally, Akshat Rathee, Managing Director at NODWIN Gaming, lead a funding round for an undisclosed investment in AFK Gaming, an Indian esports media startup.

While India is currently a relatively small market for esports, there is a high potential for the space to grow. Mobile esports in particular could be an opportunity in India as there are more than 1 billion mobile customers in the country. With games like Clash Royale, Vainglory, and Tencent’s Arena of Valor making a push into the space, this is likely an opportunity for ESL and the associated companies to get in on the ground.

More Professional Sports Teams Have Taken their First Steps in Esports

While major professional sports teams have backed esports organizations for the last several years, this last month saw a major league baseball team, the owner of a French Ligue 1 soccer club, and several former and current professional athletes investing into esports teams.

Team Vitality, best known as an EU LCS mainstay, received €2.5 million (roughly $3.1 million) in funding early in February. This investment is particularly notable as H 26, an investment group owned by Olivier Delcourt, contributed to the round. Delcourt has been the president of French Ligue 1 team Dijon FCO since 2012.

Additionally, Vision Esports raised $38 million in funding later in the month. Vision Esports has made a large impact in the industry as the parent company for both Echo Fox and Twin Galaxies. The funding round was lead by Evolution Media, an investment firm backed by Creative Artists Agency and private equity firm TPG Growth. However, backers also included notable sports figures Kevin Durant and Odell Beckham Jr. in addition to the MLB’s St. Louis Cardinals.

Vision has a robust history with investment from professional sports figures. Likely this is due to the influence of Rick Fox, owner of Echo Fox and one of the founders of Vision Esports, who played in the NBA from 1991 to 2004. Additionally, the Cardinals are the second MLB team to invest in Vision Esports. In October 2017, the New York Yankees invested an undisclosed amount into the company.

This could lead to a conflict of interest should the MLB choose to pursue their own league like the NBA and the MLS.

The Esports Observer keeps track of relevant investments in the esports industry. We do not claim to cover every investment of any size that has happened in the industry during the respective period. If you want to stay up to date with more investments and other business-related developments in esports, download TEO’s quarterly reports.

Source: https://esportsobserver.com/february-esports-investments-200-million/