15 Gaming and Esports Investors You Should Know

Aug 21, 2023

Angelina Graumann

The Esports Investment Landscape Why Esports is Good Business BITKRAFT Ventures Velo Partners Play Ventures Makers Fund 1Up Ventures Black Sheep Ventures CAA Ventures Dune Ventures GameFounders Gamerforce Ventures Konvoy Ventures London Venture Partners Remagine Ventures SeventySix Capital Griffin Gaming Partners Connect with esports investors with Visible

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The esports realm is more than just a digital battleground; it’s a convergence of passion, innovation, and immense business potential. Esports has seen a huge rise in popularity over the past decade and is continuing its upward trend. The global audience, both in terms of participants and viewers, has grown exponentially, making it one of the fastest-growing sectors in the entertainment industry.

According to DemandSage, there are currently 532.1 million e-sports audiences worldwide, and the e-sports market is valued at $1.44 billion as of 2023. This number is set to reach $5.48 billion by the year 2029.

The Esports Investment Landscape

The investment landscape in esports is dynamic, reflecting the industry’s rapid evolution. Current trends indicate a growing interest from traditional venture capitalists, corporate investors, and even celebrities. As the industry matures, we’re seeing a shift from early-stage investments to more growth-stage funding, indicating confidence in the long-term viability of esports ventures.

Valuation

Valuing an esports company can be complex. Traditional metrics might not always apply, given the unique nature of the industry. Factors like team performance, audience engagement, and brand partnerships play a significant role. It’s crucial to understand how similar companies in the space are valued and to be prepared to justify your valuation with concrete data and projections. Remember, while you want a valuation that reflects your company’s worth, it’s equally important to negotiate terms that are both favorable and fair to ensure a harmonious investor-founder relationship.

What Esports VCs Look for in Esports Investments

The weightage of these factors can vary. An investor more interested in the technology side of esports might prioritize infrastructure and assets, while another focused on branding might emphasize partnerships and audience engagement.

Team Performance and Potential: Success in tournaments, player talent, and robust coaching infrastructure.
Audience Engagement: The size and engagement level of the fan base, including metrics like social media engagement and merchandise sales.
Monetization Strategies: Diverse revenue streams, their sustainability, and potential for new opportunities.
Brand Partnerships and Sponsorships: Existing relationships with renowned brands and the potential for future collaborations.
Market Potential: Industry growth trends, expansion opportunities, and competitive positioning.
Management and Leadership: The track record of the management team, their vision, and organizational efficacy.
Infrastructure and Assets: Both physical assets, like training facilities, and digital ones, such as streaming rights.
Regulatory Environment: Understanding and navigating the regulatory landscape of esports.
Scalability: The potential to scale and the infrastructure to support that growth.
Unique Value Proposition: What makes your organization stand out? It could be unique content, community strategies, or other differentiators.
Exit Strategy: Potential avenues for investors to see a return, be it through acquisition or public listing.

Why Esports is Good Business

Many VCs recognize that esports is not just a trend but a sustainable industry. With its integration into educational institutions and the establishment of professional leagues, there’s a belief in its long-term viability.

Strategic Partnerships: The potential for partnerships between esports entities and established brands, media companies, and even traditional sports franchises offers lucrative opportunities.
Diverse Revenue Streams & High Return Potential for VCs: Esports offers multiple avenues for monetization, including advertising, sponsorships, ticket sales, merchandise, media rights, and online streaming platforms.
Global Reach: Unlike traditional sports that might be popular in specific regions, esports has a global appeal. Games like “League of Legends” or “Counter-Strike: Global Offensive” have massive followings across continents.
Mainstream Acceptance: With esports events being broadcast on major networks and even discussions of esports becoming an Olympic event, there’s a belief that esports is moving from niche to mainstream.
Young Demographic: The primary audience for esports comprises millennials and Gen Z, a demographic that’s attractive for advertisers and brands looking to establish long-term loyalty.
Technological Integration: The ability to integrate emerging technologies like AR, VR, and AI into the esports ecosystem presents opportunities for innovative startups.
Community Engagement: Esports fans are highly engaged, often participating in online forums, fan events, and even contributing to crowdfunded prize pools.
Potential for Innovation: From virtual reality to AI-driven analytics, the esports industry is ripe for technological innovations that can enhance player performance and viewer experience.

Related Resources:

BITKRAFT Ventures

Stage: Seed, Series A/B

Investment Location: Global

Key person: Jens Hilgers, Malte Barth, Scott Rupp, and Moritz Baier-Lentz

Gaming investments: Epic Games, Manticore Games, Frost Giant, Anzu, Bit Fry, Carbonated, Koji, Voicemod, etc.

Thesis: Built by founders for founders, BITKRAFT is a global early- and mid-stage investment platform for gaming, esports, and interactive media. We focus on Seed, Series A, and Series B investments in game studios, interactive platforms, and immersive technology.

Learn more about BITKRAFT’s vision here!