As I’ve written about before in The Birth of a Venture Capital Investment Thesis and Why Invest in Esports, the esports market is huge, has intense user engagement and is growing at an astronomical rate. There is great potential for incredible founders, with excellent ideas,to build businesses that generate outsized returns for early stage investors in the space.
So, who exactly, is investing in esports startups? As I worked to answer this question, by compiling a list of investors, I was surprised at some of the results.
I found 388 VCs, angels, accelerators, or companies (strategics) that had invested in esports startups. Of the 388 total investors, most of them (327, or 84 percent) have made only one investment in the space. I am not considering the one-time investors to be true “esports investors” as many early stage investors have made investments in sectors that are not a focus area, but they ended up in a deal for one reason or another.
16 percent (61 of the 388) of investors on the list have invested in more than one esports startup. Of those who have invested in more than one, there are quite a few notable names (see the full list back at my site). Some of the investors who have invested in multiple esports startups are angels or accelerators (some notable, such as 500 Startups, Y Combinator, etc.). Often the angels are partners at large VCs who then later invest in the space, when the round sizes grow, and their fund’s minimum check size doesn’t preclude investment.
Where are the investments coming from?
The geographic breakdown of the investors in this space is not very surprising. The bulk of the investors are in California, followed by New York and Europe. I did expect more to be in Asia, as a large percentage of the esports market exists in China, South Korea, Japan, etc.
The headline number of 388 total investors in the space makes it seem like everyone is piling into esports startups, and at times, it does feel like some of the rounds I’m seeing are oversubscribed, and/or competitive. However, I still believe the space is somewhat opportunistic for investors at this time (especially at the earlier stages, and certainly for those with some domain knowledge) due to a lack of institutional investors who are investing regularly in the space.
Who are the most active VCs in esports?
Of the 61 investors who have more than one Esports investment, 45 of those are VCs (16 are angel or strategic investors). I’ve listed the VCs who are active (have invested in more than one esports startup) here as a resource for founders and whoever may be interested. If I’m missing someone, please let me know and I’ll update the list. Compiling this list was a lot of grunt work, so it is likely that I missed something (contact info is at the bottom of this post).
In addition to the most active VCs that I’ve listed below, I also compiled a Crunchbase list of all the investors in esports startups that I found who had Crunchbase profiles (link here). Note: you will likely need a Crunchbase account to view the list.
Where we go from here
Investors have flocked to the esports space in the last 12-18 months. This is evidenced by the number of investors (nearly 400) that have invested in the space, whether it be in startups, or teams. As a result, the number of startups in the space has increased drastically. At this time last year I recall there being less than a dozen early stage esports startups raising money. Just this week when writing this, I updated my list of “live deals” in the space, to include 30+ that I’m aware of, which means there are likely more than that raising money right now.
The flood of money into the space is a double edged sword. On one hand, it validates the space, our thesis and our early investments, but on the other hand, it creates a bubble in the space that encourages more and more companies to be founded because money is easy to find. We all know the odds of a startup surviving and thriving. This implies that a lot of investors that flood to the space are going to lose money. My job, of picking early stage esports investments, has become much harder in the last 12 months as the number of deals to chose from, and the amount of capital to compete with have both skyrocketed.
With all of that said, I’m hopeful that the list of investors that I’ve prepared is a helpful resource to founders looking to pitch their early stage idea to those of us on the investing side of the equation that are hungry to partner with them to build the next big esports business.