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March #Esports Investment Recap: A Billion Dollar Bet $GMBL $

Posted by AGORACOM-JC at 3:04 PM on Tuesday, April 10th, 2018

  • Year is nowhere near from being over, but more than $1B invested in esports-related companies last month
  • Once again, it was the Chinese games market leader Tencent  that’s responsible for the biggest part of the cash injection.
Image Credit: ESL/Helena Kristiansson

The year is nowhere near from being over, but with more than $1B invested in esports-related companies last month, the industry likely reached its annual high already. Once again, it was the Chinese games market leader Tencent  that’s responsible for the biggest part of the cash injection.

Tencent Tightens Its Grip on the Sector In March, Tencent has made separate investments in two of China’s key streaming platforms, both announced in close succession. Huya raised $461.6M in its latest series B equity financing round, led by Tencent, while rival game-streaming platform Douyu TV  received $632M from the Chinese gaming and social media giant.

Being involved in a combined $1.1 billion in funding in one day, Tencent has elevated its already dramatic hold on one of the world’s most vital live streaming markets. For comparison, Amazon’s acquisition of Twitch  was valued at close to $1B, reportedly. According to Niko Partners, the market size for professional esports alone in China in 2017 was $1.26B, and furthermore, live streaming of esports events was the industry’s top source of revenue in the country, at $625M.

In March, Tencent made separate investments in two of China’s key streaming platforms, both announced in close succession.

Related Article: Imagine Spalding Owned Basketball, That’s How Esports Works

Other companies are expanding their market shares as well, though. Infinite Esports & Entertainment , a majority shareholder in OpTic Gaming  and Overwatch League’s  Houston Outlaws, diversified its portfolio last month, by acquiring esports apparel brand Sector Six for an undisclosed amount.

Infinite, which is backed and headed by Neil Leibman—a co-owner of the MLB franchise Texas Rangers—has acquired and partnered with a multitude of companies and esports organizations. These include broadcast and events management company NGAGE, esports agency Triggerfish, and teams OpTic, Allegiance, and Obey Alliance. The holding company plans to bring its entire portolio together later this year, with the opening of a 3,000 seat esports stadium in Arlington, Texas.

Elsewhere, one of the world’s leading producers in television content, European entertainment company RTL Group—majorly owned by German media conglomerate Bertelsmann—through its French TV network subsidiary M6, has taken a minority stake in Glory4Gamers, an amateur esports competition organizer, for an undisclosed amount.

While M6 taking a minority stake in Glory4Gamers may not be a game-changing acquisition, it’s a signal that esports might enter a consolidation phase. These kind of investments are a typical indicator for a maturity period in an industry cycle, where growth slows, focus shifts towards expense reduction, and the competitive landscape of a marketplace becomes more clear while the big companies claim their spots and deter smaller competition.

Esports Takes Off in South-East Asia

Market researcher Niko Partners estimates the number of mobile online game users in SEA will surpass 170M by the end of 2017, rising to 250M by 2021. It doesn’t come as a surprise that estimations like that attract the eye of investors like AirAsia Group CEO and co-founder Tony Fernandes. The majority shareholder of the Queens Park Rangers soccer club, who has a total net worth of $745M, last month announced to have acquired a majority share in Malaysian mobile esports organization Team Saiyan, which is to be rebranded as AirAsia Saiyan.

Team Saiyan are one of the top-ranked professional teams playing the Moonton developed MOBA title Mobile Legends. The squad currently competes in the game’s MPL competition, which is sponsored by mobile phone brand Honor, GoPro, and Singapore hardware brand Armageddon.

Fernandes founded Malaysian lost-cost airline AirAsia in 2001, which reported $408M in profit for 2017. AirAsia itself was a sponsor of Manchester United F.C. between 2009 and 2013.

Esports AI and Nutrition

Game Insight founder Alisa Chumachenko has launched a new esports company, raising $1.9M in funding. utilizes artificial intelligence to provide gamers with direct feedback and coaching, from recommending item builds to suggesting strategies in certain matchups. The investment round was lead by Runa Capital, and included participation from Ventech and Sistema VC, the latter of which invested $420K in a seed round last October. joins a growing list of companies marrying artificial intelligence with esports. Last month, esports audience monetization platform FanAI raised $2.5M during a funding round, and there is also Elon Musk’s AI technology company OpenAI, which is teaching a program to play esports games like Dota 2  and StarCraft II  at the highest level. German startup Shikenso is working on an artificial intelligence Twitch filter, adding additional options for fans to watch streams.

Runtime , an esports startup focused on bringing nutrition products to the gamer market, has raised a seven-digit seed round, led by Everblue Management. Other participants include existing investor BITKRAFT Esports Ventures , along with Döhler Ventures, Food Angels Germany, and angel investors.

Runtime, which began as a BITKRAFT incubated company, launched its online store in January 2017. The brand’s stock includes multiple flavors of its performance drink, meal shake, and a recently launched protein bar.