August Investment Recap: Fortnite Billions, BITKRAFTS $165M Venture Fund, and New Capital for Esports Organizations

August was a record month for esports investments. The Esports Observer tracked 16 investments raised by esports-relevant companies during the month. Disclosed investments accumulated to $2.78B USD, which is more than all seven previous months of 2020 combined, bringing the total sum of disclosed investments in 2020 to $4.34B. 

The news of esports-relevant investments was headlined by the $1.78B financing round raised by Fornite developer Epic Games and the closing of BITKRAFT’s new venture fund at $165M.

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

Epic Lands Second Billion Dollar Investment

Fortnite developer Epic Games closed a $1.78B corporate venture round consisting of primary capital and secondary purchases from employee equity holders. The investment, which includes a $250M strategic investment made by Sony Corporation in July, puts the company’s post-money equity valuation at $17.3B.

Participants in the investment round included UK investment management firm Baillie Gifford (roughly $250B under management), funds and accounts managed by BlackRock (roughly $7.4T under management), Fidelity Management & Research Company (roughly $680B under management), Lightspeed Venture Partners (roughly $4B under management), Ontario Teachers’ Pension Plan Board (roughly $155B under management), funds and accounts advised by T. Rowe Price Associates (roughly $1.1T under management), and American billionaire businessman and hedge fund manager David Tepper. Existing investors KKR and Smash Ventures also added to their 2018 investment.

Following the closing of the funding round, Epic Games will continue to have one class of common stock outstanding and will remain controlled by its founder and CEO, Tim Sweeney. The second-largest shareholder of the company is Riot Games parent company Tencent, which holds a considerable (Tencent acquired 48.4% of Epic Games’ available capital shares, representing a 40% stake, in 2012) minority stake in the firm.

BITKRAFT Mobilizes $165M in Capital for its New Venture Fund

Gaming, esports, and interactive media early and mid-stage investment platform BITKRAFT Esports Ventures closed the financing of its new BITKRAFT Esports Venture Fund I at $165M. The venture capital firm, which launched its first $18M Pre-Seed fund in 2017, now invests out of its $165M Venture Fund I and has made more than  50 investments deploying more than $70M since its inception.

BITKRAFT Ventures’ new fund received backing from a global investor base, including Carolwood, the family office of  Bruce Karsh; Declaration Partners, the investment firm backed by the family office of David M. Rubenstein; JS Capital, the investment firm of Jonathan Soros; as well as corporate investors such as Adidas, WPP, Advance (the owner of the Leaders Group, The Esports Observers’ parent company), and Logitech.

Enthusiast Doubles Down on Gaming

Toronto Stock Exchange (TSX) listed Canadian esports and media company and Luminosity Gaming parent Enthusiast Gaming Holdings acquired gaming platform Omnia Media for roughly $45.5M CAD ($34.1M). Additionally, the company received a $15M CAD ($11.25M) financing from a syndicate of underwriters led by Canaccord Genuity Corp

Omnia Media’s former owner, Blue Ant will be entitled to nominate a director to the board of directors of Enthusiast Gaming. Blue Ant’s ability to resell Enthusiast Gaming shares is restricted for one year.

According to Enthusiast Gaming, the combined company is expected to immediately generate positive earnings before interest, taxes, depreciation, and amortization (EBITDA). The company is also looking to reduce costs by $500K CAD ($375K) to $1M CAD ($750K) by using synergies between Omnia Media’s and Enthusiast Gaming’s business processes.

Esports Organizations Adding Capital

Recording artist Post Malone has acquired an undisclosed equity stake in esports company Envy Gaming, which owns the Overwatch League franchise Dallas Fuel, Call of Duty League Dallas Empire, and esports organization Team Envy. The deal was brokered by Post Malone’s representation at London Entertainment Group, Electric Feel Entertainment, and United Talent Agency.

Esports and entertainment organization FaZe Clan added two-time NBA All-Star Ben Simmons to its list of celebrity investors. The Philadelphia 76ers player’s investment is part of a small Series B that is yet to close. Simmons, who has appeared on the cover of the basketball magazine Slam with FaZe Clan member Thomas “Temperrr” Oliveira before, will also act as a brand ambassador for FaZe Clan and using the gamer tag “FaZe Simmo.”

Chengdu-based esports organization All Gamers secured a Series A financing led by Shanghai-headquartered industrial fund management firm Real Power Capital. The esports organization, which owns a slot in the franchised King Pro League (KPL), is looking to put the proceeds of the investment towards strengthening its business operation in Shanghai and supporting the city in becoming a global esports center.

Chinese social media company Weibo has acquired esports organization TS Gaming and rebranded it to WB.TS. The acquisition was made in two steps as Weibo acquired TS Gaming’s QQ Speed division, as well as the franchising spot at Tencent’s QQ Speed S League, in the beginning of August. Later in August, Weibo fully acquired the organization including its KPL franchise.

Chinese short-form video company Kuaishou has acquired Honor of Kings team and KPL franchisee YTG and rebranded it to KS.YTG. Reportedly, YTG was expected to sell its KPL slot for an initial bid price of ¥61M RMB ($8.82M). 

Investment firm Blue Star Capital, an early investor in the David Beckham co-owned esports organization Guild Esports, raised £550K ($736K) in a share placement. The new shares were issued at a price of £0.15 ($0.20) per share. The firm used £225K ($301K) of the placement’s proceeds to maintain its 13% stake in Singapore-based esports organization Dynasty Esports, which raised a £1.73M ($2.32M) financing round at a £10M ($13.39M) valuation.

Funds for Esports & Gaming Technology

Live-streaming tools developer Restream raised a $50M Series A financing round led by Sapphire Ventures and Insight Partners. Restream also announced the launch of its multiplatform live-streaming distribution, branding, chat, and analysis software, Restream Studio, out of beta.

Swedish esports tournament management platform Challengermode closed a $12M investment led by the eWTP Innovation Fund, Alibaba Group’s global investment arm. Further investors who participated in the financing round include Telia Ventures and GP Bullhound, and returning investors Back in Black Capital and Swedish soccer player Zlatan Ibrahimovic.

PLAYERUNKNOWN’S BATTLEGROUNDS developer PUBG Corporation made a $10M investment in 1Up Ventures, a “venture fund dedicated to building a diverse and inclusive global community of independent game developers.” PUBG’s funding marks the inaugural investment for 1Up Ventures, which was formed in early 2019.

Other Investments

NASDAQ-traded esports community and content platform Super League Gaming announced an underwritten public offering of just more than 4.54M shares priced at $1.85 per share. Gross proceeds of the offering, which were expected to close on Aug. 31, are expected to be approximately $8.4M before underwriting discounts and commissions and estimated offering expenses.

London-based sim racing focused esports organization Veloce Esports raised a £4M ($5.35M) investment round and merged with electric motorsports company Veloce Racing. Among the investors are ex-CEO of Lloyds Development Capital, Darryl Eales; former Liberty Global Executive, Eric Tveter; Russian-born scientist, mathematician, and entrepreneur, Andrei Cheglakov; and Andy Webb, former CEO of Marussia F1.

ReKTGloba​l,​ parent company of Rogue and the London Royal Ravens, acquired Fearless Media, a New York-based data-driven media marketing agency specializing in entertainment, gaming, consumer electronics, and technology verticals. 

Source: Read Full Article