One of the most recognizable teams in esports is preparing to expand.
Fnatic, which is a coalition of pro gaming teams that compete in League of Legends, Counter-Strike, Dota 2, and more, has raised $7 million in a new round of financing. Major participants in this investment include Boston Celtics ownership organization Raptor Group, MIT Media Lab director Joi Ito, Fractal Design chief executive Hannes Wallin, and Hersh Interactive Group. Esports is on pace to reach $696 million in revenues this year without including spending from fantasy esports or gambling, according to industry intelligence group Newzoo. This space could generate as much as $1.5 billion by 2020.
Fnatic explained that it wants to use this influx of cash to bring on coaches, analysts, sports psychologists, and other supports roles that you’d see on traditional sporting teams. The teams will also wants to use the money to expand its training facilities, its merchandising efforts, and its number of academy teams.
“There has been strong growth in esports,” Fnatic founder Sam Mathews said in a statement. “[And it] has accelerated in recent years, but the major shift has been in the acceptance and inclusion by sports franchises, media companies and high profile individuals who have entered and advanced the industry rapidly. We’re incredibly excited by the opportunities available within esports, and having world class investors and advisors only enhances our ability to address these opportunities and continue to innovate.”
While investors are still hesitant to put a lot of money on the line to fund new video games, many are finding it easier to believe in the potential of esports and pro teams. Fnatic is just the latest example of this after Cloud9 landed an undisclosed amount of financing in March.
And as participation in traditional sports is on the decline in high schools, the companies that run the teams in those markets see esports as the next logical step in maintaining an audience in the future. The Boston Celtics likewise isn’t alone in investing in esports as traditional-sports powers. L.A. Dodgers co-owner Todd Boehly, Hall of Fame quarterback Joe Montana, golden State Warriors wo-owner Chamath Palihapitiya, and many more have all made their own investments into this venture. And it’s specifically because they see these enterprises as a way to make a lot of money.
“Fnatic is at the forefront of advancing esports,” Raptor Group investment officer and Fnatic director Chris Pallotta said in a statement. “[It is] constantly deploying innovative forms of engagement and monetization that we believe will transform the overall sports and entertainment industry over time.”
CORRECTION: This story originally noted that the Hersh Interactive Group owned the Houston Astros. That is not accurate, and I apologize for the error.