September Investment Recap: A Series of Esports IPOs, Fresh Capital for Teams and Esports Data Startups

September marked another record month for esports investments. The Esports Observer tracked 17 investments raised by esports-relevant companies during the month. Disclosed investments accumulated to $1.57B USD, which is more than all seven previous months of 2020 combined, bringing the total sum of disclosed investments in 2020 to $5.91B. 

The news of esports-relevant investments for the month of September was headlined by several initial public offerings (IPOs). Unity Software, Corsair Gaming, and Guild Esports raised new funds by going public.

Financial terms were not disclosed for all deals highlighted in this article.

Video game development platform and technology firm Unity Software completed its IPO and began trading on the New York Stock Exchange. The Unity game engine developer raised $1.3B in the offering at a market capitalization of $13.7B. The company sold 25M shares, which represent roughly 9.49% of the company’s total outstanding shares after the offering, at a price of $52 per share in the initial offering.

On its first day trading on the NYSE, Unity’s market capitalization surpassed the $17.3B post-money equity valuation of its direct game engine competitor, Unreal Engine maker Epic Games

In its IPO prospectus, Unity revealed that it intends to use the IPO’s net proceeds for general corporate purposes including working capital, operating expenses, and capital expenditures. The company also mentions possible acquisitions and strategic investments as a potential use of the proceeds. Additionally, a portion of the net proceeds will be used to repay $125M of outstanding debt.

Corsair Gaming IPO

Computer hardware and peripherals company Corsair Gaming completed its IPO and listed on the Nasdaq Global Select Market (NasdaqGS). The EagleTree-owned company raised $118.6M before expenses in the offering. Corsair sold 7.5M shares, which represents roughly 8.2% of the company’s total outstanding shares after the offering, at a price of $17 per share, less a $1.19 underwriting discount. The offering pricing put Corsair Gaming’s market capitalization at $1.56B based on 91,849,366 outstanding shares.

In total, 14M Corsair Gaming shares were sold in the IPO. In addition to the 7.5M sold by Corsair, 6.5M were sold by the company’s majority shareholder EagleTree, which still holds a 77.62% beneficial ownership in Corsair following the IPO. 

Guild Esports IPO

British esports organization Guild Esports raised £20M GBP ($25.71M) from the underwriters of its London Stock Exchange (LSE) IPO. The company’s oversubscribed offering of 250M shares was priced at £0.08 per share. The listing, which saw roughly 40% of Guild’s outstanding shares offered on the LSE, put the company’s market capitalization at roughly £50M ($65M). Guild Esports plans to finance its expansion plans, including recruiting more player talent, with the IPO proceeds. 

Guild Esports previously raised two rounds of investments. Initially, Blue Star Capital invested £150K ($186K) into the company in late 2019. Next, Guild raised a £5M ($6.5M) private funding round, which included an investment from former soccer player David Beckham’s investment vehicle DB Ventures.  

Funds for Esports Data and Insights Provider

Berlin-based gaming and esports data provider Bayes Holding secured a $6M financing round to further expand the data and content offering on its platform and develop new platform features that benefit both data suppliers and consumers. Participants in the investment included the Pohlad Family investment group, Fertitta Capital, Sony Innovation Fund, and other sports and media investors.

Polish esports performance analytics startup EsportsLAB raised a zł4M PLN ($1.08M) investment from the zł50M ($13.45M) Satus Starter venture capital fund. EsportsLAB, which is the fund’s third investment, plans to use the investment proceeds to accelerate the development of its performance analytics software and increase the scale of marketing activities.

Danish educational esports platform GamerzClass raised a $1M financing round led by Copenhagen-based venture capital fund Bumble Ventures. Further investors in the financing round included London-based firm TrueSight Ventures, the danish growth fund Vækstfonden (which is also an investor in esports tournament organizer BLAST), former general partner at Index Ventures Ben Holmes Christian Legêne, and former deputy director of TDC Group Kathrine Stampe Anderson, who also joins GamerzClass’ board of directors. As part of the investment, the company also refreshed its board of directors and presented a new strategy.

Esports startup PandaScore, which develops artificial intelligence technology to provide statistics for esports broadcasts as well as assisting bookmakers with establishing odds for esports matches, closed a $6M Series A funding round with participation from V13 Invest, Alven, KB Partners, and Team Liquid parent aXiomatic Gaming.

Capital for Esports Organizations

Esports-focused company ReKTGlobal added Top Dawg Entertainment founder Anthony “Top Dawg” Tiffith to its ownership team. Tiffith “will explore opportunities for merch and apparel development, and music collaborations and branded partnerships, which will launch the music executive into the booming esports industry” in his role as a minority shareholder and strategic advisor to the company.

Chinese esports organization Victory Five secured investment from K-Pop band GOT7 member Jackson Wang. The organization’s parent company Shenzhen Weiwu Esports Technology previously closed a $14M Series A financing round in October 2019 from a group of undisclosed investors.

Egyptian esports organization Anubis Gaming raised a $300K seed financing round in two tranches by the same investor, an undisclosed e-commerce group. The first tranche of $200K was added to financially support the expansion of the organization’s international coaching staff and recruit additional players to venture into new games. The second tranche of a $100K capital insertion was made last month to launch an apparel line and move the organization’s teams into a fully equipped gaming house and training facility.

Chinese League of Legends Pro League (LPL) team Dominus Esports was acquired by Chinese chat service company TT and rebranded as a League of Legends division of TT Esports. Previously, TT acquired Honor of Kings team XQ and its King Pro League (KPL) franchise slot in February. The team was rebranded to TTG.XQ and has its own home venue in Guangzhou. In May, TT also became the official chat service partner of the KPL.

Minneapolis-based esports content and experience company Wisdom Gaming Group secured a $3M Series A financing round led by the local venture capital fund Excelsior Ventures Fund. The company plans to use the investment proceeds to accelerate the growth of its esports marketing platform, digital content, and gaming media network portfolio.

Investments in India

Indian esports content platform AFK Gaming raised a $200K Pre-Series A financing round from investment firm Inflection Point Ventures. AFK Gaming will use the investment proceeds to “link reach to revenue through programmatic and direct advertising while also expanding the scope of coverage to additional esport titles in Southeast Asia.”

Indian esports and mobile gaming platform Mobile Premier League (MPL) raised a $90M Series C funding round led by SIG and early-stage tech investor RTP Global. Further investors in the round included new investors MDI Ventures and Pegasus Tech Ventures and returning investors Sequoia India, Go-Ventures, and Base Partners. The investment brings MPL’s total funding to $130.5M after previously raising $40.5M.

Other Investments

Microsoft plans to acquire the parent company of Bethesda Softworks, ZeniMax Media for $7.5B in cash. The acquisition would include several Bethesda-owned development studios, including id Software, ZeniMax Online Studios, Arkane, MachineGames, Tango Gameworks, Alpha Dog, and Roundhouse Studios. Microsoft expects the acquisition to close in the second half of its fiscal year 2021, starting in January 2021.

Core developer and operator Manticore Games raised a $15M financing round led by Epic Games. Manticore’s game creator platform Core, which was released in its alpha phase in March, is built in Epic Games’ Unreal Engine game development platform.

Nations Ventures, esports merchandiser We Are Nations’ investment vehicle, invested in social platform startup Smerf. Nations Ventures became the platform’s first strategic investor, which allows video game players to find teammates and social gaming experiences without relying on a game’s internal matchmaking system.

Philadelphia-based sports marketing company Playfly Sports acquired two esports assets, the Collegiate StarLeague (CSL) and WorldGaming Network (WGN), from the Canada-based cinema chain Cineplex. Furthermore, Playfly Sports hired former Nerd Street Gamers COO Rob Johnson to serve as CEO of the new Playfly Sports esports division.

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