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Since its inception in 2016, Talon Esports has grown into one of the world’s premier esports teams. Talon competes in many of the top esports competitions globally — from League of Legends to Street Fighter 5 and beyond.
In just a few short years, they’ve racked up hundreds of thousands of dollars in tournament winnings, and in the fall of 2020, the business raised $2 million in funding to continue its international growth.
Sean Zhang, Talon’s CEO, explains that they decided to take on funding because, “[We were] motivated by advice that recommended we go for it because there was interest in the market for esports investment.”
Talon is a trailblazer when it comes to innovative ways to generate revenue. Aside from tournament winnings, partnerships/sponsorships, merch sales, and agency work are just a few of the other ways the company adds to its bottom line — ultimately boosting its overall valuation.
When we chatted with Sean earlier this year, he gave us insight into the ways Talon stays ahead of their competition, highlighting a few keys to their success over the years.
1. Build multiple streams of revenue
“We’ve got four key revenue streams including publisher/media fees, in-game item sales, tournament winnings, and sponsorships,” explained Sean.
Many gamers know Talon for their flagship partnership with European Football Club, Paris Saint-Germaine (PSG). Before establishing their partnership, PSG ran their own League of Legends esports team.
Since teaming up, the duo has increased their focus on talent development with an athletic approach to competitive gaming. Aside from their top four revenue streams, Sean highlighted the importance of growing their creative studio to expand the business’s presence across the gaming world.
“We’re also significantly investing in our creative studio,” he explained, “to service both our existing teams and external clients that have been interested in moving into our main markets, like Hong Kong, Taiwan, and Thailand.”
2. Know your audience, especially in overseas markets
As Sean asserts, “Loyalty and dedication are key in Southeast Asia.” Breaking into any new market can be difficult, but breaking into international markets in Asia or Europe — without boots on the ground — can be nearly impossible. “It’s not easy to get into China without local people,” he said. “You need to be invested in the way Chinese people do business.”
Without understanding the nuances of your new target markets, it can be challenging to make headway. Finding local partners that are connected within your new market will help make transacting in new regions a lot easier and improve your chances of future success.
3. Plan for growth with people, infrastructure, and scalable technology
“We have a dedicated person to manage finance — our CFO,” said Sean. “But there are certain things we have to chase, certain things we forget — organization is key for us.”
Talon is a unique case where both Sean and his partner, Jarrold ‘Jazz’ Tham, came to the business with significant finance experience, which has proven invaluable to their rapid growth and overall business success. One of the keys that Sean and Jazz realized early on is the importance of keeping track of your cash flow — money in and money out — particularly as you begin to hit your growth stride.
As your business grows, the number of international payments teams can quickly become overwhelming. Esports teams have many partners to payout regularly, and thus ensuring your AP/payables department is properly organized can be a significant game-changer. Not to mention, a best-in-class payout experience will help you retain top-tier partners, vendors, and suppliers — giving you an advantage over your competitors.
As the esports industry continues to grow, businesses that can get organized will have a leg up on their competition. Finance is a critically important area for esports teams because of the international nature of the gaming world. To learn more about major industry trends, check out this webinar featuring Chris Smith, Founder of BIG Esports — a leading esports consultancy based in Australia: The Rise of Esports: Capitalizing on the Next Multi-Billion Dollar Industry.
Tipalti, which is a Hebrew word meaning We Handled It™, helps gaming businesses of all sizes eliminate up to 80% of their manual payables workload. Tipalti is trusted by gaming companies like Twitch, Roblox, Enthusiast Gaming, Esports Engine, and many more.
Evan Heby is Senior Manager, Partner and Industry Marketing at Tipolti.
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