February Investment Recap: Esports Team Ventures into Game Development, CS:GO Rankings Provider HLTV Acquired

For the second consecutive month, The Esports Observer tracked less than ten investments for the month. In February, esports relevant companies raised $110M USD in disclosed investments through seven closed investment rounds. In comparison, a total of $29.4M was raised in January in nine investment rounds.

In the last few years, February has been a month seeing few investments except for several financing rounds led by Chinese multinational conglomerate Tencent Holding. In February 2019, The Esports Observer logged $66.6M in disclosed investments. In February 2018, the sum was significantly higher at $679.2M, although a bulk of it, $604M, was attributed to investments led by Tencent Holdings.

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

Betting on HLTV

Counter-Strike: Global Offensive-focused news, statistics, and discussion forum platform HLTV.org’s parent company HLTV.org ApS was acquired by sports betting media group Better Collective for €34.5M EUR ($37.9M).

HLTV, which was founded in 2002, started out covering Counter-Strike and Half-Life news before developing a rating system for Counter-Strike players and teams, in 2010 and 2015, respectively. In May 2019, HLTV data was officially integrated into Counter-Strike: Global Offensive. Furthermore, the site’s ranking is widely used by tournament organizers to seed tournaments.

Other assets of HLTV.org ApS include dust.dk, a website covering the Danish Counter-Strike scene, and dust2.us, a website covering the Counter-Strike scene in the Americas.

FaZe Loan

American esports and entertainment organization FaZe Clan entered into a convertible loan facility worth $22.7M. The company received financial advice on the deal from Canadian investment bank Canaccord Genuity. The lender, which has not been disclosed, has been given a seat on FaZe Clan’s board of directors.

According to a release provided by Canaccord Genuity, the loan is convertible at a pre-money equity valuation of $220M. The loan will be used for working capital and general corporate purposes, according to the company.

A convertible loan is a financial tool that is often used by young companies in immediate need of liquidity as it has several disadvantages compared to an equity investment, which usually takes more time to be raised. Convertible loans are most commonly used as bridge loans. 

Expansion at a Fast Tempo

Esports and gaming entertainment organization Tempo Storm raised a $3.3M investment led by technology investor Galaxy Interactive. Tempo Storm stated that it will be using the proceeds of its latest investment round to “grow far beyond the confines of the traditional esports organization.” The company’s expansion efforts include the development of digital deck-building card game, The Bazaar, and live travel Twitch show, Game Changers.

Galaxy Interactive, which is a division of the digital assets and blockchain technology-focused merchant bank Galaxy Digital, invested via its $325M Galaxy EOS VC Fund, which is a partnership with software development company Block.one.

Publishing Platform Raises $40M

Technology and digital publishing platform Minute Media, which is run by the Israel-based company Pro Sportority Ltd., raised $40M in venture capital led by returning investor Dawn Capital with participation from existing investors. This latest investment brings the total funding raised by the parent company of esports media platform DBLTAP to $160M.

Aside from DBLTAP, Minute Media is the owner of six more sports and lifestyle-focused digital media publications, including 90min, 12up, Mental Floss, The Big Lead, The Players’ Tribune, and FanSided.

Esports & Gaming Veterans Invest in Bit Fry Game Studios

Arcade-action sports video game developer Bit Fry Game Studios closed a $3.5M investment round from 1Up Ventures and BITKRAFT Esports Ventures. According to a release, the capital will be used to support the growth of Bit Fry’s arcade-action sports gaming franchise, Ultimate Rivals.

Aside from the financial support, the developer will count on the extensive industry expertise of its latest investors. 1Up Ventures is a venture capital fund focused on esports, which was founded by Xbox co-creator Ed Fries, while BITKRAFT is the single most active esports-focused alternative investment fund, founded in 2017 by industry veteran Jens Hilgers.

Capital for Online Viewing Platforms

Esports streaming feed aggregator Juked.gg’s parent company Buffd Inc. raised an $800K pre-seed round to accelerate the development of its online viewing platform. The investment round was facilitated by 500 Startups along with several other investors, including Mike Morhaime, co-founder of Blizzard Entertainment; as well as Amy Morhaime, a former Blizzard Entertainment vice president of esports.

U.S.-based PiQPiQ Inc., parent company of online viewing platform Hearo.Live, raised a $1.8M financing round in early February. Following the investment, the company launched Hearo.Live’s open beta, which provides virtual rooms that allow users to watch videos, streams, and live events while being able to voice chat in real-time.

Later that month, on Feb. 28, the PiQPiQ launched a crowdfunding offering through OpenDeal Portal LLC, which is doing business as Republic, looking to raise a minimum of $25K and up to $1.07M. The maximum valuation of the company at which the investments can convert is $12.5M. The crowdfunding campaign offers a so-called “SAFE” security adjusted for crowdfunding, which is a concept created by seed accelerator Y Combinator called simple agreement of future equity (SAFE). Investors will not be granted voting, information, or inspection rights. The crowdfunding campaign must reach its minimum funding goal before its deadline on Apr. 30. At the time of this writing (Mar. 9), 96% or $24K of the funding goal has been raised.

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