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PlayVS has raised $50 million for its platform for high school esports. The round comes just 10 months after the company raised a previous round of $30.5 million and 15 months after PlayVS raised $15 million. That’s $96 million in only 15 months (Update 9/18/19 7:54 a.m. Pacific time: 13 months, considering that the latest funding closed two months ago).
That’s a whirlwind fundraising record, and Delane Parnell, CEO of the company, said in an interview with GamesBeat that the reason the money keeps coming is that the Los Angeles company has executed on its plans to build a competitive gaming platform for tournaments for high school esports players. For instance, the company will expand to all 50 states with its Seasons events and platform by this fall.
Repeat investor NEA led the round, with participation from Battery Ventures, Dick Costolo and Adam Bain of 01 Advisors, Sapphire
Sport, Michael Zeisser, Dennis Phelps of IVP and Michael Ovitz, co-founder of CAA.
So what has been so impressive about this 20-month-old company for investors?
Three top investment pros open up about what it takes to get your video game funded.
“There’s a lot to be excited about when you think about just the last year,” Parnell said. “We started a company in January of 2018, we started that partnership. We built the product and the team. We launched our Seasons events. Since then, we completely executed this against all of the things that we said we were going to do. We successfully completed our seasons with three games. We grew dramatically from the first season to the second season.”
“We’ve had a lot of success by being focused,” Parnell said. “Other esports companies have not been focused on building really good products first. We spend our time thinking about PlayVS and our community — coaches, administrators, players, parents, and teachers. We are on the front lines having conversations with the stakeholders.”
PlayVS has previously announced new game partnerships with Psyonix and Hi-Rez Studios, publishers of Rocket League and Smite respectively. It also partnered with Riot Games’ League of Legends. PlayVS has not announced any games for upcoming seasons yet.
PlayVS continues to focus on enhancing students’ experiences by adding popular game titles and more state associations in order to grow high school esports’ audience and attract players interested in other game genres. The company has partnered with nine new state associations for statewide championships since its previous announcement.
“We’ve believed in Delane’s vision for PlayVS since its founding and we’re honored to continue partnering with the company through this next phase of growth,” said Rick Yang, partner at NEA, in a statement. “It’s been tremendously exciting to witness PlayVS catalyze the growth of high school esports — and this is just the beginning! The platform has the promise and potential to shape the future of esports at scale.”
The company has also grown from 16 employees at the end of 2018 to a current total of 41, with plans to double that before the end of the year.
“Battery Ventures always strives to work with companies that are seeking to define the future of an industry, and that’s exactly what PlayVS is doing with its platform,” said Roger Lee, general partner at Battery Ventures, in a statement. “By providing access to leading game titles and creating a pipeline for esports athletes, PlayVS is filling a huge gap in the market and we’re eager to see what’s next.“
The software startup’s first product, Seasons, was released in five states in October 2018 and expanded to eight states in the spring of 2019. Of the thousands of players who participated last year, 51% of students were new to the games that they played. On average, schools had 15 students participate in esports, which is more than half of the average ice hockey participation (27 students) and exactly half of the average baseball and basketball participation (30 students).
Over 13,000 schools, which represent 68% of the country, are on the waitlist to build an esports program through PlayVS. For comparison, 14,247 high schools in the US have a football program. And beyond high school, there are more avenues for the company to expand, Parnell said.
“We’re onboarding as many schools as we can, and we’ve empowered the coaches to build their teams,” Parnell said. “At the end of the spring season, we created a wait list. A lot of our investors are excited about those numbers.”
Through these partnerships, students will have access to these games as part of their PlayVS league participation fee. For example, with free-to-play games, students will receive in-game perks like Champion Unlocked for League of Legends and for paid games. Publishers will provide copies of their game to every school competing in their league on the PlayVS platform. This gives students a level playing field.
PlayVS said all of these games require critical thinking and teamwork, which are valuable skills students can gain through participation in esports. Unlike traditional sports, joining a PlayVS team does not involve tryouts, cuts, or any experience – just the desire to play. Students can sign up on the PlayVS website for the inaugural season now.
Unlike traditional sports, PlayVS teams can be comprised of any students, without tryouts and regardless of experience, gender or age. There will be no limit to how many unique teams each school can have, which creates a “no-cut” environment and allows all students the chance to compete in esports at the varsity level.
Building the team
PlayVS also said it has added three new executives: chief financial officer Gabi Loeb, a longtime finance executive at startups and corporations including Zefr (backed by IVP) and News Corp.; chief technology officer Neel Palrecha, Y Combinator alum with experience from Snapdocs and Headspace; and vice president of growth Robert Lamvik, previously at Headspace and Spotify, where he led the performance marketing team through the transition from paid-only to a freemium business model.
“We’ve done a good job hiring against our goals,” Parnell said. “We built our team at the intersection between esports and tech and education. And that’s allowed us to have great success just given our relentless focus on sort of executing against our vision.”
The road ahead
The fall season starts on October 21st and runs through January 2020. Schools have until October 11th to sign up for the fall season or can opt to join in the spring season, which starts February 2020.
The participation fee is $64 per player, paid for by either the parent/guardian or the school. This cost provides access to in-game content, valued at more than $700, or the game itself, which ranges from $20 to $60.
For the first time, PlayVS will service all 50 states (including Washington, D.C.). And 15 states will compete for a championship, in partnership with their state association. These states include Alabama, Alaska, Arizona (AIA, CAA), Arkansas, California, Colorado, Connecticut, Georgia (GHSA, GISA), Hawaii, Kentucky, Massachusetts, Mississippi, Rhode Island, Virginia, and Washington D.C.
States not endorsed by their state association will compete regionally for a PlayVS Championship. Rivals High School eSports League and All-Star eSports League.
Parents and esports
I asked Parnell if parents are the enemy, as they likely would rather have their kids read books in high school instead of play video games.
He replied, “Parents want their kids to just succeed. Every parent believes their child is the next Michael Jordan and whatever talent they have. Maybe it is playing tennis or soccer. Every parent thinks their kid is the best. And they certainly want to support their kid in pursuit of that ambition. And so what we’re able to do is allow kids who are really good at playing video games, and more importantly, really passionate about video games and community, and we allow them to be recognized for their talents, to be validated for your talents. I think parents are really excited about that aspect.”
Parnell said that a woman from Massachusetts said her son had never played any sport at his high school. But League of Legends changed his life. He met friends, improved his grades, and had a lot of benefits from having such a success in his life. His mother was so impressed that she flew herself and the boy out to Los Angeles to meet with PlayVS. When Parnell came out to meet her, she broke down in tears.
“We’ve had thousands of those stories sort of come in from students. But when we didn’t expect was how it touched the parent,” Parnell said. “She was overjoyed at the impact we had on her child and flew out on her own dime just to meet our team. It was one of the most surreal experiences that I personally ever had while building this company. Because in that in during that moment, she really went into intimate detail around the impact that we’ve had on her kid’s life and we’re super grateful for those stories and want to have more of that impact.”
I mentioned that apps such as TeamSnap have done wonders for parents and kids in organizing sports such as soccer. As soccer parents, we live by it. Parnell said that PlayVS goes a step further, as it shows the matches, the practices, any other events, the standings, the rankings for players, profiles, match histories, and individual match statistics. Many coaches have never run teams before, so PlayVS sets up content workshops to help with that. These things are all part of making the community feel comfortable with esports.
There is a lot of hype, and some leagues won’t work out, Parnell said.
“But there are a lot of different sports and activities,” he said. “Not every sport needs to be like football. There’s room for baseball, basketball, tennis, lacrosse, and ice hockey. Not everything is going to reach the scale of League of Legends or Fortnite.”
“There are 2.4 billion gamers in the world, and I’m pretty sure some large number wants to compete in esports,” he said. “But in North America, only 1,000 players actually experienced esports in its purest form. And those players play across 18 professional leagues. And the average age of those leagues is less than three years old. The space is nascent.”
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