Matcherino has figured out a way to get spectators and pro gamers alike more engaged in esports. It has created a platform where fans can nominate players for show matches and then does everything to make that match happen. It essentially formalizes the process of staging grudge matches and drawing attention to them, and it is launching larger tournament events today.

The Seattle-based startup is one of the latest to seek its fortunes in the esports market, which is expected to grow 43 percent from $325 million in 2015 to $463 million in 2016, according to market researcher Newzoo. And it is setting up more strong relationships among spectators or fans, livestream players on platforms such as Twitch, and professional gamers who compete in live esports tournaments around the globe. One of the company’s first live tournaments — with players challenging each other in the Overwatch shooter beta — had a prize pool of $1,002 over the weekend.

“We had our first match more than five months ago,” said Grant Farwell, CEO of Matcherino, in an interview with GamesBeat. “It started as a way for people in esports to have this streamer play that streamer and crowdfund that show match. It handles the payouts, scheduling, alerting the fans when the match will happen. We launched it and have had a lot of people use it.”

Esports is catching on big time, from pioneering companies such as Riot Games with its League of Legends game, to later entrants such as Electronic Arts, Activision Blizzard, and ESPN. That environment helped Matcherino raise a $1.25 million funding round in the fall from Madrona Venture Group, Vulcan Capital, and some angel investors, including Seattle Seahawk football player Russell Okung.

Matcherino logo

Above: Matcherino logo

Image Credit: Matcherino

The company started about a year ago with grudge matches, where spectators can nominate one livestream personality (such as Twitch broadcaster) or an esports athlete to play against another. Other fans can pitch in money to watch the match, and Matcherino keeps the funds in escrow. Then it hosts the match and pays the prize money to whoever wins. It keeps just 4 percent of the proceeds for itself.

“We looked at how the communities organized their own events, and it was tough,” Farwell said. “You had to have escrow accounts, prize money payments, and scheduling. We really help people stage show matches.”

And now, with the tournaments, Matcherino can stage much larger events that last for much longer than the relatively short grudge matches. In one recent tournament, Matcherino had 32 teams with six players each playing Blizzard’s upcoming Overwatch shooter game.

“With tournaments, we could have hundreds of players at one event,” Farwell said.

The show matches are breaking records every couple of weeks. Spectators catch watch the events on livestreaming sites Twitch, Azubu, and Hitbox. Players can set up the matches using Twitch identities.

“We’ll embed Twitch on the platform and make it easy,” Farwell said.

Competitors tend to use Kickstarter crowdfunding campaigns, but that can be a lot harder to set up, Farwell said. FaceIt has a way to do tournaments too for Counter-Strike Go and League of Legends games.

Some game companies are starting to launch their competitive games with Matcherino. Valve used crowdfunding from players to create a huge tournament for Dota 2 esports players. The tournament, dubbed The International, had $18 million in prize money, with $6.6 million for the winners.

More than 18,000 people watched the very first show match. The company has remained small at eight people, but it will start raising another round later this year so that it can expand.

“One of the reasons we liked it at Madrona is that is driven by engagement, and people want to subscribe to their favorite streamers,” said Daniel Li, an associate at Madrona Venture Group, in an interview. “Normally, you just watch those streamers in chat. With this model, you can direct the entertainment and get the streamer to play someone else.”

“Esports is definitely good for engagement and getting people to come back again,” Farwell said.