A short time ago, the 2019 world finals wrapped up in that had previously hosted Metallica and Ariana Grande. But the packed venue could hold a mere half percent of the that tuned in to the competition online. The biggest pieces of a multi-million dollar prize pool were up for grabs as Phoenix, a Chinese team, walked 3-0 over , a European team.

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The event was a good reminder that esports is not merely a digital phenomenon, but also a global events business. Holding that in mind, let’s quickly look at esports companies working to support players, tournaments, and the live-side of competitive gaming that have recently raised money. It’s been too long since we last checked in on esports companies and the investors who are powering their growth.

Quick Hits

We have a few rounds to go over, so let’s proceed in order of smallest to largest.

, a company that deals with the nitty-gritty corporate side of esports, earlier this month. The money came from the , an Ohio-based investing group. Unsurprisingly, eFuse is based in Ohio as well. According to , the company helps with esports “talent recruitment, traditional job placement, and the sourcing of sponsorship deals.”

Given that esports has been lauded more for its ability to attract attention more than the industry has been praised for its ability to generate revenue, companies like eFuse may have a key role to play in the market, provided that their ability to help groups come to sponsorship deals

Moving along, two weeks ago from , its second round. Crunchbase News reported at the time that “Mainline has developed a white-label tournament platform that specializes in hosting and helping brands ‘manage, monetize and market their esports programs.'” Again, I’d note that there is an emphasis on monetization.

But the biggest, recent esports-related round that caught our eye was from late October. Vindex, launched by alums and , is what DiGiovanni called a “holding company” in a note to Crunchbase News. Inside its portfolio today are (focused on esports production), and (focused on esports operations).

The company will introduce “additional verticals” according to DiGiovanni in 2020. Notably, the founder said that Vindex is “profitable today and are focused on healthy sustainable business opportunities across all of our verticals,” while being focused on helping “partners extract as much value as possible from their esports activities.” In DiGiovanni’s view, value could constitute either revenue or “reach,” or, we presume, both.

The dollar amount that Vindex put together was notable, and that it’s also working to help esports professionalize and generate more revenue is also worth remembering; each of the newly-funded startups we looked at has at least one eye on making money, it seems. That’s good news for esports.

Ahead

There’s more on the horizon. put together to invest in esports, . The new capital pool from ACM is dubbed the “Artists Esports Edge Fund.” Astute readers of Crunchbase News will recall that we covered a $35 million Series B investment raised by esports organization back in July. Artist Capital Management led that round.

Capping this small roundup, esports has become so busy that there are new products like being built to help keep fans in the know.

And because it’s Friday, today Crunchbase News learned that there are a who are ranked in competitive League of Legends. Obviously, it’s time for a Camp David LAN party.

Illustration: .

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Existing investors , , , and angel investor also participated in the round.

Philadelphia-based Nerd Street Gamers builds facilities (dubbed “Localhost”) that house esports leagues, training camps, tournaments, and showcases on professional-grade equipment. It saw 277 percent year-over-year revenue growth in 2018, according to founder and CEO .

As part of its deal with Five Below (also Philly-based), the two entities will build 3,000-square foot Localhost spaces connected to select Five Below stores beginning with a multi-store pilot in 2020.

Depending on what they can glean from the pilot, Five Below and NSG will plan a future rollout that could include more than 70 locations over the next several years, they said.

I was curious as to how the deal came about.

Fazio told me that Five Below had approached his company through a mutual connection about a year ago for its advice on creating “authentic gaming experiences” in their stores to promote their new gaming products.

“As we began working together, we realized how closely our missions are aligned,” Fazio said.

He said the deal with Five Below will help his company realize its vision of “ a world where esports is accessible and inclusive for everyone.”

“Too few have access to the type of equipment and internet connections required to compete at the top levels, and by addressing that at a national scale we can increase real-life opportunities for millions of people,” Fazio added. “By working with Five Below, we will be in a position to open venues in every major city in the country, bringing esports to a whole new segment of gamers.”

In a statement, Five Below CEO described the partnership with Nerd Street Gamers as a “unique opportunity.”

“Gaming is a trend our younger customers are actively enjoying, and working with Nerd Street Gamers will help us to provide an exciting gaming experience that appeals to our core customers and beyond,” he said, while at the same time showcasing the retailer’s technology-related products and accessories. Five Below has over 850 stores in 36 states.

In addition to the Localhosts connected to Five Below stores, NSG plans to build 50 larger regional and university-based facilities. It currently has facilities in Philadelphia, Denver, and Huntington Beach. These include the first public gaming facility in a pro sports arena, and Localhost Rowan University, which was built as part of its effort to bring professional-grade esports training facilities to universities across the country. (Note that as of September 2018, the had more than 80 member colleges and universities, with 79 of them providing partial or full athletic scholarships to student gamers.)

Nerd Street Gamers was developed inside the offices in 2014 before being spun out into its own business in 2016 by Fazio. What initially started as an employee LAN party (computers connected by a local area network) quickly grew into some of the largest competitive gaming tournaments in the country, he said.

To date, the company says it has raised $13.9 million. It has 37 employees, up from 13 a year ago, according to Fazio.

Esports is a growing industry, despite monetization challenges. Last month, we reported on , a startup building the infrastructure and an official platform for high school esports, raising a $50 million Series C in its third funding round over a 13-month period.

Blog Roll Illustration:

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The financing, which closed in July but is just now being disclosed, comes less than 10 months after the Los Angeles company’s $30.5 million (which we covered at the time) and 13 months after its , bringing its total raised to $96 million. PlayVS was founded in early 2018.

led the latest round, which included participation from , and of , , , , general partner at and , co-founder of .

PlayVS’ first product is dubbed ‘Seasons,’ and so far brings League of Legends, Rocket League and SMITE to high schools across the country. The company is working on more partnerships that it declined to name at this time.

In a phone conversation, PlayVS founder and CEO (who we profiled in this piece last year) did tell me that a lot has happened since the Series B. For one, the startup has now “successfully operated” two seasons and according to Parnell, “validated the appetite for the product.”

PlayVS (pronounced Play-versus) currently has 13,000 schools on its waitlist which, according to Parnell, represents 68 percent of all high schools in the United States.

“Many are going through onboarding and getting activated for the Fall 2019 season,” he said.

PlayVS has also shown it can grow and scale its state partnerships, he said, growing from five in the fall of 2018 to eight in the spring of 2019 and now up to 15 (including Connecticut, Georgia, parts of Texas, and California). This means that students in those states can compete in state championships. (States not endorsed by their state association will compete regionally for a PlayVS Championship.) Also, its platform will be available to high schools across all 50 states (including D.C.) this fall.

“In our first two seasons of operation, we saw no product failures and learned a ton,” Parnell said, “in particular around game integration.”

The company plans to use its new capital “efficiently,” he said.

“Throughout the summer, we rebuilt the product, matured the company and built out the executive team,” Parnell said, including people from , and other startups. It has increased its headcount from 16 employees at the end of last year to a current total of 41.

Ultimately, the company is eyeing ancillary markets and wants to become a platform for amateur players in general.

“Our goal is for PlayVS to become a generational product like Twitch, so we want to leverage the resources we have to hire really smart people to build incredible products,” Parnell told me.

Within high schools, its goal is for as many students as possible to be able to participate. Currently, PlayVS charges $64 per player to participate per season, a sum that Parnell said is far below that of other sports. But for now, as it is a nascent program, schools need to recruit more coaches so that more players can participate, according to Parnell.

Beyond the participation fee, Parnell sees potential revenue streams in building additional products and services to bundle onto its platform.

“There’s a ton of opportunity to leverage software we’ve built and are building,” he told Crunchbase News. “We want to take that to amateur esports, growing our presence internationally and alongside publishers. Our vision for the company has evolved.”

Early Investor Weighs In

Investors seem excited about that vision.

NEA Partner notes his firm has backed PlayVS since its founding and his enthusiasm has only increased with time.

“While there are established forums for casual gameplay and professional gameplay, there is a big gap in the market when it comes to amateur esports,” he wrote via email. “The high school demographic is the perfect place to start to close this gap, and PlayVS has made tremendous strides in launching this new market.”

In particular, NEA has been impressed by the team PlayVS is building out as well as with the “pace of growth and expansion…early on across schools, states, and games across multiple publishers.”

And the icing on the cake? People seem to really like the product. According to Yang, feedback from athletes, coaches and parents “has been extremely positive.” Both students who have played other sanctioned sports and newcomers to sanctioned activities have participated so far, he said.

“PlayVS is changing lives and experiences of student athletes in all sorts of positive ways – building community, self confidence, friendships, life lessons, and boosting academic performance,” he wrote. “I think we are just at the beginning of the creation of a very large category.”

Other Players In The Game

Meanwhile, PlayVS is not the only esports-related company raising money this week. Today, a $2.5 million seed raise. and Varga Capital led the round for the San Francisco-based global esports tournament platform.

“The majority of the esports market has few opportunities to compete for cash prizes,” said XY Gaming co-founder and CEO Aaron Fletcher, in a . “Through our simple, free, and one-click to enter and play platform, we enable gamers of all skill levels to take their gaming to the next level in a fair and secure environment.”

Also in July, , a popular esports team, announced that it closed a $35 million Series B.

In general, esports has had its ups and downs. While funding in the sector is certainly up as it continues to go mainstream, there have been concerns about monetization. It will be interesting to see how the space plays out in terms of winners and losers.

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Photo Credit: Sean Yalda

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Recently, 100 Thieves raised in October of 2018. That puts the firm’s new, and larger Series B under one year since its last financing activity. While venture-backed companies often raise on an aggressive 18-month cadence, that interval can be cut when there’s sufficient investor interest.

Esports, Heck Yeah

For the uninitiated, 100 Thieves manages esports teams across a number of titles including and , runs ecommerce operations based on its brand, and broadcasts and publishes videos, streams, and podcasts. So, it’s a multi-game, multi-platform group that generates revenue through merchandise, advertising, and gaming itself.

Indeed, the firm double-clicked its recent success, claiming today that its “esports teams are winning championships, [its] apparel is selling out, and [its] podcasts have topped the charts.” This is the modern promise of esports itself, that the fanbase has matured to the point of being very monetizable.

There’s some truth to the boast, at least. Perusing store this morning doing Very Serious Work I did discover that every item offered was sold out. Not bad.

But, following our recent coverage on the world of esports from both Mary Ann and myself we wanted to go deeper. So, here are a few questions and a few answers from , 100 Thieves President and COO, conducted over email.

Let’s see what he has to say.

Q and A

• Crunchbase News (CBN): Why raise so quickly after Series A? Did the company need more capital?
• John Robinson: We want to be the biggest brand in gaming & esports, and raising this Series B allows us to accelerate our growth.  We don’t currently need the funds, but after meeting Artist Capital Management we knew they’d be a great partner for the long run, so decided to do the round now.
• CBN: What portion of the money will go towards expanding the firm’s merch operation?
• JR: Our apparel business is doing extremely well so we’re looking forward to opening our first retail location at our new headquarters in Los Angeles.
• CBN: In time, does apparel and other forms of merch comprise the company’s largest revenue slice in time?
• 100 Thieves declined to answer.
• CBN: Does the team have new esports titles under consideration? Does the new capital help move into new titles?
• JR: We have multiple new titles under consideration and expect to announce new games later this year.
• CBN: Which current competitive title is 100T most excited about from a fan and revenue perspective for the next year?
• JR: We have six qualifiers for the inaugural Fortnite World Cup, making us one of the top teams in the world, so we’re eager to see how Epic Games develops Fortnite as an esport.
• CBN: There has been a number of reports detailing concern from certain players in the esports world that a correction could be coming, as some companies in the space get ahead of their ability to generate revenue. How does 100T approach the question of growth and self-sufficiency, and does the company consider the esports market inflated?
• JR: We are generating a significant amount of revenue through both our sponsorships business and apparel business, so that’s not a concern for us. Our ability to generate meaningful revenue in our first 18 months is why there was so much interest in our Series B.
• CBN: Can the company provide YoY revenue growth percentage?
• 100 Thieves declined to answer.

I want to point out that I got all the way to this point in the post without pointing out that I’m a diehard fan (no matter the game). That aside, as an esports believer who recalls watching ripped VODs from Korean Broodwar tournaments back in the days before streaming because it was the only way to watch the game at that level, I’m just excited to see gaming where it is today.

And with that, back to our regularly scheduled cynicism.

Illustration: .

Contributed reporting to this piece.

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And it’s not only gaming-friendly brands that are helping power the esports boom. Sure, Need4Seat and Razer are still helping finance tournaments. But State Farm now sponsors the competitive League of Legends circuit, and more traditional brands are expected to hop on the bandwagon.

But underneath the esports glitz, the huge events, the growth in online audiences, and the rapid rise of new titles and streaming brands, trouble lurks.

Concerns are growing among industry participants, observers, and skeptics alike that esports-focused startup valuations are too high, and that monetization still lags audience growth. And until those issues are resolved, the rise of esports will flounder.

Few expect a collapse, but a reckoning is not outside the realm of possibility. We reached out to investors and founders in the esports arena to reconcile the hype versus the reality.

Placing Bets

To say global VC firm Partner is bullish on esports would be an understatement. During an animated phone conversation, Yang explained that esports is “a pretty nascent space with a lot of promise.” NEA looked at esports companies for about three to four years before investing in South Korea-based (previously known as KSV Esports) and . PlayVS, which we covered here, as well as profiling its co-founder here, is focused on building an infrastructure for esports in high schools.

For Yang, a lot of the excitement stems from his own personal experience as a gamer in high school.

“I’d have my swim club practice and then come home and wake up in the middle of the night to start gaming with my friends,” Yang said. “At that time, gamers were considered to be ‘nerds.’ But that has massively changed as gaming has become more mainstream and melding with pop culture. We’ve seen this shift in gaming and gaming culture over the past few years. And that’s sort of indicative of why we’re so excited about this space.”

One reason esports struggles, Yang believes, is that people who aren’t in the industry, or aren’t familiar with it, view it very “narrowly.” And even though it’s more mainstream, it’s still young. Yang points out that there are less than 1,000 professional gamers out there. And professional leagues have (on average) been around for only about three years.

Yang also acknowledges that the monetization aspect is a valid concern. To him, the clearest value creation is on the side of the publishers and game developers, who are increasingly finding ways to make money with in-game purchases (Epic’s Fortnite is a prime example) of virtual goods. Historically the gaming industry has grown up very siloed, with each publisher carving out their own piece, he said. As the space matures, that’s slowly changing. The second most mature sector within esports is the distribution of live gaming.

“The broadcasting layer is super dominated by Twitch and YouTube,” he said, estimating that the top 10 earners on YouTube last year were related to gaming. “People have claimed it’s silly for people to want to watch other people play video games. But you could make the same argument for other sports. People watch so they can better. And so now. in the last few years, you’ve got this massive audience of both gamers and people watching gaming.”

Just as sports players are conscious of what shoes they were, gamers being watched by millions of viewers have a vested interest in looking good, too.

“Gamers want to look cool while playing the game so they spend money on skins (items that players can acquire in games) for example, and now you’re starting to see more offline and real-life brands tapping into this channel because there’s a bunch of eyeballs,” Yang said.

For example, Fortnite recently collaborated with the Michael Jordan brand and Nike to get Jordans in the game. Electronic music producer DJ Marshmello also performed a concert in the middle of a Fortnite game with 10 million different participants from around the world watching, he added.

“Do you know how many years and hours of travel of tours it would take to get 10 million viewers,” Yang asked. “It’s mind-blowing.”

The global aspect is not to be underestimated, he believes.

“There’s a huge opportunity to tap into all aspects” of gaming across its social, content, and virtual goods components, he said. And to , monetizing analytics around gaming is a huge opportunity as well.

The 22-year-old co-founded an Austin-based startup called out of his personal desire to improve at playing League of Legends. Essentially, the company employed machine learning algorithms to help gamers get better at playing games.

Ultimately, in 2018, the bootstrapped Asuna was acquired by Swift Media, the company behind esports team , after being sponsored by Microsoft and Xbox. The technology he helped develop is now being incorporated into Swift’s overall infrastructure so that its whole network of analytics websites (used by players of games like League of Legends and Fortnite) will be powered by the technology Asuna built. It will power a new personal assistant called Pix.

“So many people are competitively playing, so there’s a very big market there to sell tools,” he said. “It’s almost like automated coaching tools to help these people play better, even those who are not (yet) getting paid to play. There’s a huge market to bring a lot of knowledge to.”

For , CEO of Mark Cuban-based esports startup , esports presents a big opportunity considering that so many people “haven’t figured out how to monetize it.”

His company recently launched streamer betting with a system that uses AI trading bots, based on computer vision technology and predictive analytics, to come up with live odds.

“In other words, you can be watching your favorite streamer play Fortnite and the system places odds on certain things happening during that match while they’re playing live,” Sood, who sold a previous startup to in 2006, told Crunchbase News.

His company also launched something called “umode,” which can connect to the platform and give users the ability to bet on themselves while playing games. It’s currently legal in 41 states, he said.

Overall, Sood (who also was the creator and general manager of Microsoft Ventures), is naturally bullish on the space and believes the wagering side of esports has “huge” potential.

“There’s very few people who understand it so those building on it are building on the future,” he said. “A lot of people don’t get the full potential of the space. I still talk to people who have never heard of it. Yet there are hundreds of millions of people who watch it. So raising awareness is part of the battle.”

Today, the esports industry is an international business that is more industry than cottage endeavor.

Powered by the growth in high-speed Internet connections, streaming technology, and rising decoupling of consumers’ viewing habits, esports fits neatly between a number of changes in the media and technology landscape. But has the hype outpaced reality? Some would say yes.

In May, Kotaku reporter that: “More and more, esports is looking like a bubble ready to pop.” She went on to say that 18 “experts” on the North American esports industry expressed concerns to Kotaku, with “some describing it merely as ‘inflated’ and others as ‘completely unsustainable.’”

Yet others point to statistic such as Goldman Sachs that the esports industry will see annual revenue jump from $655 million in 2017 to $2.96B by 2022. (For other similar stats, see my previous story on esports funding.)

Time will tell if concerns about monetization in particular are a real threat. Ultimately who wins in the esports game will be those companies that can crack the profit code.

Illustration:

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Continuing our 2019 IPO coverage, meet . Based in Wuhan, China, the company has since its birth in 2013. and helped finance DouYu’s growth.

DouYu was last valued at $2.4 billion , making the deal yet another unicorn IPO. And as the company is targeting the New York Stock Exchange for its debut, it’s an offering we need to understand.

We’ll approach the company from two perspectives. First, some notes on its business, then the resulting numbers.

How Big Is Streaming?

DouYu claims to be the “largest game-centric live streaming platform in China.” The numbers backing up the statement are notable.

According to , “[a]s of December 31, 2016, 2017 and 2018, we had 98.7 million, 182.1 million and 253.6 million registered users, respectively.” Registered users growth helped DouYu tally 153.5 million MAUs in the fourth quarter of 2018, up from 134.3 million in the year-ago Q4.

That’s a lot of people. And, notably, DouYu isn’t spending heavily to acquire them. According to the filing, its “user base is primarily acquired through organic growth, with over 92% of our new mobile users in the fourth quarter of 2018 [installing] our apps without third-party marketing.” Of course, mobile users are a fraction of its total user base, but the data point is useful all the same.

There are other stats provided, including that DouYu “active users” spent 24.2 million hours per day on the platform in the fourth quarter of 2018, up from 17.2 million in the year-ago period. And that it had 6.0 million “registered streamers” in the fourth quarter of 2018, up from 3.9 million in Q4 2017.

All that usage drives revenue. How? In one main way, it turns out. According to DouYu, live streaming “generated 77.7%, 80.7% and 86.1% of our total net revenue in 2016, 2017 and 2018, respectively,” which was “primarily derived from the sales of a wide array of virtual gifts.”

So, nearly 9 in every 10 dollars of DouYu revenue generated last year came from the purchase of “virtual gifts.” How high does that money stack? Let’s find out.

The Numbers

DouYu is an odd company. It grew its revenue to more than a half billion dollars in 2018 but generated gross profit losses in both 2016 and 2017. A company this large failing to have positive gross margins over a multi-year period is rare.

Given its history of gross margin losses, DouYu does not have a history of operating income, let alone net profit.

Off of $531.5 million in revenue in 2018, the company generated a slim $22 million in gross profit. $147 million in full-year operating costs led to a $125 million operating loss. DouYu’s full-year net loss came to $127.4 million.

While DouYu’s operating losses are steep, the company does have a history of quick revenue growth. In RMB, here’s how fast the streaming company grew over a three-year period:

• 2016: 786.9 million RMB
• 2017: 1,885.7 million RMB
• 2018: 3,654.4 million RMB

That’s a few doubles in a row. Investors love to see that sort of growth. And since DouYu has a history of improving gross margins, you can somewhat trace out a path to less unprofitability at the firm. However, sans gross margin improvements, DouYu will need far-lager revenues to generate enough gross profit to cover its operating costs.

DouYu doesn’t need to raise money. It has over $800 million in cash and equivalents in the bank and burned less than $90 million in cash during 2018 (operating and investing cash flow, combined). So, the company has enough money to grow for a long time.

That makes an IPO look like a liquidity event, instead of a fundraising effort. With over $1 billion raised, the company has a lot of pressure behind it to provide a return. And the IPO window is open. So, out goes DouYu long before it can draft a clear map to profitability.

Yes, it’s good that companies are going public before they are nearly done growing up. But the pendulum can swing the other direction as well.

Illustration: .

U.S. venture investment in the fledgling ­field of organized professional competitive video gaming spiked by a whopping 1,125 percent to $146.49 million across 34 deals in 2017, compared with $11.96 million over six deals in 2013, according to Crunchbase data.

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Between 2016 and 2017, investment amounts spiked 186 percent. However, deal flow was nearly the same, signaling larger average deal sizes.

Meanwhile, market researcher Newzoo estimates the global esports market by 102 percent to reach $655 million in 2017. Another data source pegs that number to be even higher.

A recent found out that the global gaming industry generated $108.4 billion in revenue during 2017, while esports itself accumulated $756 million in revenue. Newzoo estimates that esports will become a $1.5 billion market with 600 million active viewers around the world.

Dallas-based CEO and Founder speculates the amount of funding in esports is even higher than data indicates because “a number of companies don’t report” funding activity.

The past couple of years in particular “have seen a massive influx of investor capital and professional sports teams” investing in the space, he said. Last November, his own company saw a high-profile exit when Dallas Cowboys owner Jerry Jones, along with investor John Goff, in his 15-year-old company for an undisclosed amount.

Lake formed one of the first professional teams in esports and is impressed by the recent surge in interest in a field he’s been intimately involved in for more than a decade.

“The entire ecosystem has exploded in the past few years,” he told Crunchbase News. “It’s one of the most compelling cutting-edge places you can be.”

Big Paydays For Digital Might

Most professional video gamers are between the ages of 18 and 23. Some parents who lectured their children on how video games would never help them be successful are finding themselves eating their words. Skilled participants get paid well to play video games, travel around the world, and compete against others.

Players participating in the International Dota 2 Championship in August 2017 were competing for of more than $24 million. It is the largest prize pool in the history of esports. Colleges and universities are even to varsity video game players.

To Lake, it’s only logical in the new digital era that a digital sport would be gaining popularity.

“When people are passionate about a sport, it usually matures into something more serious,” Lake said. “When people first started playing baseball in New York 150 years ago, people thought it was pretty ridiculous when people started getting paid for it. Now, we’re the baseball players for this culture. This generation has been gamified since birth.”

Like traditional sports, there are now agents, lawyers, marketing firms, and managers built into the esports space.

“For advertisers who want to speak to this generation and generations after, this is a very viable way to market to them,” Lake said.

Buying Into The Trend

, managing partner of Dallas-based, has invested in seven esports companies in recent years. He believes in the field so much his firm has essentially turned esports into its second thesis. Two-thirds of its investments are in the B2B enterprise software industry, while about one-third are in the esports space.

One of Deep Space’s portfolio companies, Dallas-based, made headlines last year when Neil Leibman, the co-owner of MLB franchise Texas Rangers, and co-investor Chris Chaney in the startup for an undisclosed amount.

While it’s likely that the majority of the population has not even heard of OpTicGaming, it’s notable that the company currently has 3.34 million followers on Twitter. It’s not that far behind the NFL’s Dallas Cowboys with its 3.71 million followers.

Overall, Hays believes one of the factors behind its success is that players and viewers “are highly engaged.”

“There’s a lot of money to be spent,” he told Crunchbase News. “It’s a huge, global market that’s growing super fast.”

Hays sees opportunity in improving analytics on how valuable viewers and engagement is within the space. One of Deep Space’s portfolio companies, Santa Monica, Calif.-based , is focused on just that.

“An esports competition gets millions of viewers on a Sunday afternoon but sponsors don’t pay as much for the same number of eyeballs on a Monday night football game or other NFL broadcast,” Hays said.

Another appeal to esports, Hays believes, is that it’s a short-form content platform that is particularly appealing to today’s generation. And thanks to companies like, a social video platform for gamers, there’s a giant community being built around esports.

“With so many communities being formed and no barriers to entry, there’s a huge media opportunity there. It’s a sport that’s accessible on any device, meaning you can watch and play it on a computer, phone, or any interactive device,” he said. “And viewers can interact with players. That’s far more valuable than just airing some commercial that nobody watches.”

Betting On Digital Sports

Something that could open up a whole other can of worms for esports is if certain states, such as Texas, legalize sports gambling. One company poised to benefit from that happening is, a Seattle-based startup that aims to provide a safe and legal place to gather, game, and bet on esports. The company has developed the tools and algorithms needed to analyze all the matches and create what Sood describes as “the most comprehensive sports book for esports on earth.”

Esports pioneer Sood founded Unikrn in 2014 and has raised a total of $10 million in venture capital since inception. It also raised $31.4 million in an ICO (Initial Coin Offering) in October 2017 from investors including Dallas Mavericks owner and.

Sood is most known for founding, the world’s first PC gaming manufacturer, which was to for an undisclosed amount in 2006. He also started , where he worked until 2014.

“I’m a long-time gamer, and have been watching this space for a while,” said Sood.

He’s not surprised that venture interest is up.

“Even though some people are still trying to figure out how to make money in the space, they are paying attention because viewership is up and the fan base continues to grow. It’s safe to say that esports is the fastest-growing sport in the world right now and it’s only going to continue to grow,” Sood told Crunchbase News. “More people watch Twitch today than some TV channels.”

Sood agrees that esports is a more intimate sport with high player engagement.

“Professional players have relationships with fans at a very high level,” he said. “It’s definitely different that way in that fans are engaged with players in a way that you don’t see in any other sports.”

The audience is young and tech savvy, making it appealing to advertisers.

“As big brands want to approach millennials and communicate with them, there’s probably no better way to do it than esports,” Sood said. “We’re dealing with a very current, very relevant customer base.”

With such a huge jump in funding in a few years’ time and major professional sports owners acquiring esports companies left and right, it’s probably safe to say that this is an industry that will only continue to grow.

iStockPhoto / aurielaki

The launch of the Overwatch League, a new esports competition for the eponymous game is off to a cracking start. According to various esports observers, early viewer numbers for the league’s debut were strong.

According to , the numbers were impressive:

Other reports put the figure at 415,000, or just a few less. Regardless, the numbers imply that the Overwatch League has a fighting chance. (The actual numbers, , imply a higher aggregate number, but the above Twitch numbers are good enough for directional scale.)

Overwatch, a shooting game from Blizzard (the folks behind the Starcraft and Diablo franchises), launched in 2016, drives material revenue. Reporting , for example, pegged Overwatch revenue at $1 billion and growing.

(Overwatch is the “eighth Activision Blizzard game to generate $1 billion in revenue,” VentureBeat noted.)

Of course, Blizzard is not the first games company to take a popular title into the esports realm. Riot Games’ League of Legends became an esports powerhouse in its own right, for example.

And all the above brings us back to the interesting bet that Amazon made in 2014 to buy Twitch, the leading esports streaming company.

From The :

Female founders see no gains

• The percentage of women-founded venture-backed companies globally has plateaued at approximately 17 percent since 2012. And as we come to the end of 2017, that percent has not shifted, a Crunchbase News analysis finds.

• , Uber’s chief rival in Southeast Asia, has raised a strategic investment of undisclosed size from Korea’s Hyundai. The investment follows a massive $2 billion financing led by SoftBank and China’s Didi Chuxing last July, which included plans to extend the round by a further $500 million.

• ���dzܱ�����-�����������, the operator of a network of self-service kiosks for duplicating keys, raised $83 million from Comvest Partners.

• New York-based  has raised $113 million in debt and equity financing to build out its online platform, which allows accredited investors to buy alternative assets like real estate and business loans. Greycroft and Raine Ventures led a $12.8 million equity investment, while an unnamed backer provided $100 million in debt.