eSports

February Investment Recap: Strategic Acquisitions, Seed-Sized Funding Rounds, and Changing Ownership

During the month of February 2021, The Esports Observer tracked 15 investments raised by esports-relevant companies. Disclosed investments amounted to $1.47B USD, bringing the total sum of disclosed investments in 2021 to $1.67B.

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

EA Completes its Acquisition of Codemasters

Nasdaq-listed game developer and publisher Electronic Arts (EA) completed the acquisition of U.K.-based racing game developer and publisher Codemasters. EA acquired the developer at a per-share price of £6.04 GBP ($8.43) at an implied enterprise value for Codemasters of £945M ($1.32B). EA financed the acquisition with cash on hand.

Codemasters is primarily known for its racing games, including the officially licensed F1 game franchise, driver journey-focused simulator Project Cars 3, and recently launched story-driven off-road racing game DIRT 5. The acquisition will add Codemasters’ racing games to EA’s racing game portfolio, which includes several arcade racing games such as the Need for Speed franchise. EA intends to integrate Codemasters into its EA studios organization. EA expects the acquisition to “result in access to more platforms, reaching more geographies, and integration into more business models to increase consistency, reach, and revenue.”

Triggered by the acquisition, the management teams of EA and Codemasters initiated a review of the operation of both businesses to assess how they can work effectively and efficiently together and a review of Codemasters’ products in the context of Codemasters’ strategic objectives within the wider EA group to understand how to leverage EA’s publishing and commercial knowledge to enhance Codemasters’ product performance. The completion of the reviews is anticipated to take up to 12 months.

Chinese LPL and KPL Owner Raises $100M

Multiple esports organizations owner and developer of Chinese chat service TT Voice (a Discord-esque service catering to the Chinese market), Guangzhou Quwan Network Technology, raised a $100M Series B financing round led by venture capital firm Matrix Partners China with additional participation of investment fund Orchid Asia and others.

Guangzhou Quwan Network Technology owns two esports organizations, the League of Legends Pro League (LPL) franchise TT Gaming and the Honor of Kings Pro League (KPL) franchise TTG.X, which the company both acquired in 2020.

Heroic Sold for a Second Time Within 3 Years

Danish esports organization Heroic got acquired by Nordic esports organization Omaken Sports, which was founded in 2020 by Norwegian gaming influencer Joachim “Noobwork” Haraldsen. Omaken Sports previously raised €15M EUR ($18.2M) to finance the acquisition and development of Heroic and Omaken. As part of the acquisition, Omaken Sports will integrate its PUBG roster into the Heroic brand, which will be the brand the organization is developing going forward.

Heroic was initially established in August 2016 and became part of the RFRSH Entertainment group, which at the time owned esports organization Astralis and esports tournament organizer BLAST. Due to World Esports Association’s (WESA) multi-team ownership rule, RFRSH sold Heroic to Seranades Global in November 2018.

More Team Acquisitions

Canadian Securities Exchange-listed Australian payment processor SQID Technologies acquired a 50% equity stake in the Australian gaming and esports company ICON Esports, the parent of Australian esports organization The Chiefs Esports Club, through a $2.15M AUD ($1.66M) investment. The transaction valued ICON Esports at $4.3M AUD ($3.32M). Following the acquisition, ICON Esports will focus on further developing revenue drivers outside of the core esports organization, including opportunities in the form of strategic mergers and acquisitions, the launch of its new e-commerce business, and developing products and services using SQID’s payment technology.

Australian esports organization Dire Wolves acquired its competitor AVANT Gaming and united the two organization’s teams under the Dire Wolves brand. Dire Wolves, which was founded in 2014 around the creation of a League of Legends team, only became a multi-game organization in 2020 through the acquisition of N8 Esports and Sydney Drop Bears, moving into Overwatch, FIFA, and more. By the acquisition of AVANT Gaming, Dire Wolves will now move into Counter-Strike: Global Offensive.

Seed-Sized Funding Rounds

Belgian technology startup 3D Aim Trainer secured a €1M EUR ($1.21M) financing round led by its existing investor Freshman Fund, which also participated in the initial angel round of 3D Aim Trainer back in July 2019. The company, which was founded in July 2019 and develops software to help FPS gamers improve their aim, revealed that it will use the investment proceeds “for three main purposes: expanding the team, bringing the product to other platforms, and making aim training fun.”

Brazilian esports company Final Level received an R$8.5M BRL ($1.58M) investment from a syndicate of investors, including Atmos Capital, OutField Capital, 1st11, Kaducaio Holding, and other family offices. Final Level owns the Brazilian esports organization Gamelanders, which is currently fielding one of the top Valorant rosters in Brazil and operating a Youtube channel that receives over 500M views per month.

Slovenian esports statistics and analytics startup Twire secured a €300K EUR ($361K) seed financing round from Croatian investment fund Fil Rouge Capital. Twire, which was founded in 2019, developed a statistics and analytics platform that provides data and statistics of professional and semi-professional esports tournaments. The startup intends to use the investment proceeds to further develop and add more advanced features to its platform in addition to expanding into new games such as PUBG Mobile, Valorant, and Counter-Strike: Global Offensive.

Australian esports business knowledge platform GGWP Academy raised a 350K AUD ($270K) pre-seed financing round from an all-woman lineup of investors, including Eleanor Ventures, Working Theory Capital, and Scale Investors. Additionally, GGWP entered the Startmate accelerator, a 12-week program supporting Australian and New Zealandic startups, raising an additional $75K AUD ($58K) from the program’s mentor community.

Belgian-based esports health and performance brand Qallo raised a $1.3M financing round. Qallo, which was founded last year and recently opened an esports performance center in Antwerp, Belgium, intends to use the investment proceeds to market their supplements targeting competitive gamers and esports organizations.

Other Acquisitions

Computer hardware and peripherals company Corsair Gaming acquired content creator design platform Visuals by Impulse, which will join Corsair’s portfolio under its streaming equipment and software brand Elgato. The acquisition of Visuals by Impulse marks Corsair’s third major move into the live streaming market, following its acquisitions of Elgato in 2018 and EpocCam in 2020. As part of the acquisition, Corsair obtained Visuals by Impulse’s intellectual property, technology, and full staff.

Gaming hardware manufacturer Razer acquired console accessories brand Controller Gear from its parent company Marketing Instinct. Controller Gear, which was established in 2014, specializes in creating licensed peripherals and merchandise for popular console brands, including Xbox, PlayStation, and Nintendo. As part of the acquisition, Controller Gear co-founder and Senior Vice President Jon Buller joined Razer as director of product development.

Other Investments

In-game advertising platform Anzu.io raised a $9M financing round co-led by gaming, esports, and interactive media-focused venture capital firm BITKRAFT Ventures and HBSE Ventures, the investment arm of Dignitas backer Harris Blitzer Sports & Entertainment. Anzu intends to use the investment proceeds to grow marketing and sales, build new products complementary to its core in-game advertisement technology, and expand to the U.S., starting with Los Angeles and New York. 

Esports infrastructure company and tournament organizer Nerd Street Gamers raised an $11.5M financing round led by San Francisco-based venture capital firm Founders Fund, with additional participation from all of its existing investors. The investment brings the company’s total funding to approximately $25M. 

Gaming-focused social networking platform eFuse secured a $6M investment round led by its existing investor Ohio Innovation Fund. Further investors in the financing round included Philadelphia 76ers point guard Seth Curry, Cleveland Browns cornerback Denzel Ward, Dallas Cowboys running back Ezekiel Elliott, New England Patriots defensive end Chase Winovich, and Cleveland Browns wide receiver Odell Beckham Jr. The company plans to use its fresh capital to launch new products, expand its eRena events, finance marketing efforts, and make key hires.

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