Modern Times Group (MTG) has invested $11 million in seven game and esports startups in the first half of 2019, making it one of the most prolific game company investors in the world.
To date, Stockholm, Sweden-based MTG has invested more than $21 million from its venture capital fund into 16 companies and a total of 20 investments. In 2018 we had about 2.4 billion video game players in the world, but industry analysts expect that number to grow to 2.9 billion as early as 2022 (according to market researcher Newzoo), and the global esports audience reached 395 million in 2018 and is expected to grow to 645 million by 2022 (A.T. Kearney).
The new investments span startup game developers across several game genres, including narrative, competitive, social massively multiplayer online (MMO), and game creation platforms in the U.S. and Germany.
And MTG has also made majority stake investments in companies like ESL and DreamHack in esports and Kongregate and InnoGames in gaming. Altogether, MTG operates portfolio companies in 30 countries around the world.
Among the new investments are Redwood City-based Dorian, Austin based game developer Tonk Tonk Games, gamer rewards platform Playfull from Los Angeles, German game studio Sviper founded by Ex-InnoGamers and San Diego-based GoMeta.
MTG’s largest VC investments in terms of estimated value are Bitkraft Fund (where MTG is a limited partner), AppOnboard, Phoenix Labs, the Play Ventures (limited partner), and Sviper. It also owns majority positions in San Francisco-based game studio and publisher Kongregate and German game developer and publisher InnoGames, famous for its hit game Forge of Empires launched 2012 that recently surpassed 500 million euros in lifetime revenue.
“Gaming and esport is the future of entertainment, and we are excited to invest in what we believe are seven of the most promising early stage startups with excellent teams, products and ideas”, said Jørgen Madsen Lindemann, CEO of MTG, in a statement.
MTG complements its bigger investments with smaller investments in early-stage start-ups in gaming and esports through the MTG VC Fund. The goal is to invest in eight to 10 deals per year: 60% in gaming, 30% in esports and 10% in augmented reality and virtual reality. MTG launched its VC Fund in November 2017, which makes its 20 investments in 16 companies all the more impressive.
“We are already seeing attractive valuation upticks on our investments, such as Phoenix Labs, AppOnboard and the Bitkraft seed fund. Deal flow and value creation opportunities continue to improve now that we have established MTG as a leading games and esports VC in the West,” said Arnd Benninghoff, executive vice president of esports and games at MTG, in a statement.
Phoenix Labs recently launched in Epic store, AppOnboard recently acquired a no code game creation platform and the BITKRAFT seed fund recently realized an attractive exit of portfolio company The Esports Observer.
The new investments are as follows:
- Bitkraft Esports Ventures – the world’s largest dedicated esports VC fund. MTG invested in Bitkraft’s first seed fund in 2017 and again in its second fund this year.
- GoMeta – San Diego-based maker of interactive software creation platforms requiring low or no coding capabilities. The company has raised $6 million from prominent investors such as Bitkraft Esports Ventures, former Disney CEO Michael Eisner, Zynga founder Mark Pincus, and Josh Elman of Greylock.
- Dorian – A San Francisco startup focusing on the underserved female audience in gaming. A gaming startup founded by a veteran team with experience from companies like Pixelberry, Telltale, and Nexon. Dorian addresses the underserved and untapped market of female progression games already successful in Asia like “Hello Niki,” focusing on narrative storytelling games built around the pillars of interactivity, social integration, non-linearity, and user-generated content targeting millennial/GenZ female players.
- Tonk Tonk Games – an Austin-based esports and social first game studio. This mobile game company includes veterans with decades of collective experience from Blue Sky, Wizards of the Coast, EA, Disney and Pixar. The startup is planning a first release in 2019 leveraging proprietary facial animation technology. MTG invested in Tonk Tonk alongside Bitkraft Esports Ventures.
- Sviper – developer of realtime competitive player-versus-player strategy game with collectible card game elements. This German company was founded in 2016 by three industry veterans with mobile and free to play experience from Germany’s biggest gaming companies. Their latest release, Super Spell Heroes, a real-time 1-vs.-1 puzzle duel game.
Follow on investments in the first half of 2019:
- Playfull — This Los Angeles-based company makes a software-based rewards platform under the slogan, “Play games, win food. It allows restaurants and eventually retailers to offer gamers real geo-targeted rewards and products when they play games they love. Other investors include Boston Seed Capital and other prominent angel investors.
- Nomadic – Location-based VR pioneers from San Francisco started this company to make tactile, walkable VR adventure games. Other investors include Horizons (Hong Kong) and Vulcan Ventures.