VY Esports has raised a round of funding for an esports platform that automates and simplifies the process of getting brands to sponsor esports teams and events.
Santa Monica, California-based VY Esports wants to bridge the gap between brands and esports. It will do so by creating a platform where big brands can invest in advertising for multiple events or teams. Market researcher Newzoo estimates that esports will be a $1.5 billion market by 2020.
“The question is what stops the big media brands and non-endemic advertisers (those not connected to gaming) from spending as much money as they do in other sports,” said Oleg Butenko, CEO and founder of VY Esports, in an interview with GamesBeat. “Esports remains an untapped market for brands due to fragmentation and lack of structure across the many events and titles in the industry. We want to be the guide for the big brands in esports.”
Butenko was introduced to esports in 2014 after his friend, Anton Cherepennikov, owner of the esports team Virtus.pro, took him to an esports event in Frankfurt, Germany. Butenko thought the event was amazing and he joined a group USM Holdings that invested $100 million in Virtus.pro in 2015. The audiences were huge, but the monetization wasn’t fulfilling its potential, Butenko said.
“The VY Esports platform will create new opportunities for marketers to tap into the highly engaged and growing global esports audience at much greater scale, while also helping event organizers better monetize their tournaments,” said Blair Ford, venture partner of Raine Ventures, in a statement. “Oleg has an impressive history of creating and leading businesses, including in the esports space, and we are excited to work with him to help bring this new platform to marketers around the world.”
VY Esports will use the financing to invest in talent acquisition and build its operations as well as partner relationships. As part of the fundraising, Ford will join the company’s board. Butenko said that the company can help brands navigate the tough space of esports fans, who prefer authentic gaming sponsors and advertisers. Brands want to pitch something authentic to fans, and that’s not easy, Butenko said.
As it creates packages for sponsorship and advertising, VY Esports will aggregate the advertising inventory around existing events. That means it will sell a package deal of multiple events that can give a brand a bigger impact than just a couple of days at a tournament finale, Butenko said.
The company will enable advertisers to tell a continuous story across multiple distribution formats and game titles by bringing together the ad inventory across many of the esports events into one platform. The company will work with advertisers to develop and distribute branded content for popular global esports events and tournaments. This content will include narrative-driven video around the players, behind-the-scenes content, game highlights, analysis, recap shows, and news.
VY Esports was formed in 2017, and it has five employees. Butenko said that VY Esports will develop its own multi-game and industry-wide live events and tournaments, including college tournaments and showcase events.
Butenko formerly served as the CEO of Megalabs, the over-the-top TV services platform for telecommunications company Megafon. He helped grow the company from a few employees to more than 500. And in 2014, Butenko launched United Music Agency, a Russian music streaming content aggregator.