The biggest esports investors of 2021
The last few years have been a whirlwind of esports investments. Early adopters have seen their valuations grow surrounding growing franchise prices and bigger sponsorship deals.
Since then, insecurity revolving around the sustainability of further esports expansion has been a topic visited by investors, gaming pundits, and players. Still, endemic and non-endemic valuations from outlets such as Statista say the global market revenue from esports increased 50%, jumping to $1.08 billion in early 2021 from the previous year.
Current projections estimate the industry will be worth $1.67 billion by 2024. This stems from a variety of different factors surrounding the normalization and improving organization of competitive gaming.
From a viewer perspective, standards of operations also led the way for a more streamlined fan experience. This, in turn, has opened up new avenues for investment, from merchandising to peripherals to live events.
With elite players attached to top teams and fans geared up to follow both throughout the year, more spectators are also interested in wagering on large events. With the US opening to sportsbooks, this has opened the doors for countless fans but wagering on esports isn’t the same as traditional sports.
Despite the availability of risk free betting from trusted names, leading esports pundits and analysts have yet to sign long-term contracts with broadcasting and bookmaking groups. In other words, the industry is still evolving in terms of how games and teams are analyzed.
Investors don’t seem to have these same qualms in terms of valuing teams. More and more esports organizations are seeing significant investments from large investment firms and adding boards full of celebrities and corporate high-rollers.
With this in mind, here are a few of the biggest investments from the past year.
Fnatic and Marubeni Corporation ($17 million)
In late May, London-based team Fnatic announced a $17 million deal with Japanese investment conglomerate Marubeni Corporation. The corporation regularly funds major companies spearheading new ideas, from aerospace projects to new forms of energy.
Fnatic’s reach has multiplied in the last few years. It has teams in most major esports titles, with more than 100 staff members who remotely monitor affairs from locations around the world.
The investment is designed to introduce Fnatic to the Asia-Pacific gaming market, something the organization has been dabbling in with its Dota 2 operations. The move will see one Fnatic team based out of Japan.
VSPN and Tencent Holdings ($160 million)
In late 2020, VSPN announced a $100 million dollar investment run led by Tencent to expand the esports provider’s reach across Asia. Aside from Tencent, other investors included Tiantu Capital, SIG, and Kuaishou.
Shortly after, in January 2021, VSPN announced another investment round which targeted the provider’s global reach. Currently, VSPN partners with around 70% of all the esports tournaments held in China. This next round, which garnered around $60 million in further investment, will help the group expand into Western markets.
Evil Geniuses and Wolverhampton Wanderers (Fosun Sports Group)
In July, Evil Geniuses announced a major investment from Fosun Sports Group, which owns the Premier League’s Wolverhampton Wanderers team. Though the investment from Fosun was only described as being a minority contribution, the Evil Geniuses subsequent valuation pegged the team at a net worth of $255 million.
With the team’s partnership with Fosun and the Wanderers, Evil Geniuses will expand further into Asian markets. This will eventually see the organization join several other organizations in maintaining operations across three continents.
It also marks one of the largest partnerships between an esports team and a traditional sports team. Evil Geniuses will look to leverage Fosun’s knowledge of how to market and profit from sponsorships, merchandising, and broadcasting rights.
Excel Esports ($23 million)
British esports group Excel Esport received an investment from JRJ Group in July to help fund its new headquarters. The $23 million investment isn’t the first from the group; JRJ is also a majority shareholder in the company.
The investment will be used to build a new headquarters in London, but will also be funneled toward a new digital platform being developed by the group XL.gg. Additionally, the funds will be used to help Excel expand into new markets in Europe and beyond, as well as new gaming titles, including Valorant and Fortnite.
This move comes at a pivotal point for Excel and is indicative of the efforts of other medium-sized esports teams. Excel previously secured investments from other major groups like Sony, AndaSeat, and Eleiko.
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