January Investment Recap: Strategic Acquisitions, Raising Operating Capital, and Fueling Esports Startups

During the first month of the new year, The Esports Observer tracked 12 investments raised by esports-relevant companies. Disclosed investments amounted to $198M USD.

Financial terms were not disclosed for all deals highlighted in this article.

VSPN Adds Capital, Acquires Competitor

Chinese esports solutions provider VSPN (Versus Programming Network) closed a $60M Secondary Series B financing round, led by Prospect Avenue Capital (PAC), with additional participation from Guotai Junan International and Nan Fung Group. VSPN revealed that it plans to use the investment proceeds for innovative esports production technologies, developing its esports IP operations, new esports content, and overseas esports businesses. VSPN is also looking to further expand internationally once the global COVID-19 pandemic is over.

Furthermore, VSPN completed its acquisition of Chinese esports solutions provider Banana Gaming & Media, which will retain its current operations and remain an independent subsidiary of VSPN. The company’s founder Sicong Wang will serve as the vice-chairman of VSPN’s strategy committee.

Motorsport Games Goes Public

Racing game developer, publisher, and esports ecosystem provider Motorsport Games went public on the Nasdaq Global Select Market on Jan. 13. The company raised gross proceeds of approximately $69M, selling 3M of its Class A common stock in its initial public offering (IPO) at a per-share price of $20. The underwriters of the IPO were Canaccord Genuity and The Benchmark Company.

Motorsport Games, which has offices in Miami, Orlando, Silverstone (United Kingdom), and Moscow, was formed in 2018 by international motorsport-focused media and technology company Motorsport Network as a wholly-owned subsidiary. Following the IPO, Motorsport Network remains Motorsport Games’ majority owner.

Motorsport Games intends to use the IPO net proceeds for “working capital and general corporate purposes, including product development, such as for mobile products and additional racing series, the buildout of APEX, our go-to destination for the virtual racing community, the development of our proprietary racing-focused gaming engine, which we refer to as the ‘MSG Engine,’ sales and marketing activities, capital expenditures, the possible repayment of certain outstanding debt and strategic acquisitions and investments.”

Bilibili Esports Secures Seed Funding

Bilibili Esports, a Shanghai-headquartered esports organization which is majority-owned by the eponymous Chinese live streaming platform Bilibili and its leadership around Bilibili CEO Chen Rui, raised a ¥180M RMB ($27.85M) seed financing round led by the Zhejiang Chuangxiang Cultural Fund. Further investors that participated in the investment round include investment fund Tianfu Culture Investment and media company Chengdu B-Ray Media.

Bilibili Esports was established in February 2018 and now owns and operates two major Chinese esports teams, the League of Legends Pro League (LPL) franchise Bilibili Gaming (BLG) and the Overwatch League (OWL) franchise Hangzhou Spark. Additionally, Bilibili Esports offers esports and gaming event organization, production, and management services.

Strategic Acquisitions

U.S. esports platform builder PlayVS acquired high school esports teams infrastructure provider GameSeta to accelerate its growth phase and support its expansion into the Canadian market. As part of the acquisition, Tawanda Masawi and Rana Taj, who founded the Vancouver-based startup GameSeta in 2019, will join PlayVS and lead its Canadian operations. Alongside its geographic expansion, PlayVS revealed that it plans to expand beyond high schools and colleges by launching a direct-to-consumer product.

Gaming accessories manufacturer Turtle Beach acquired microphone manufacturer Neat Microphones from Stray Electrons to diversify its product portfolio. The acquisition was funded from Turtle Beach’s cash positions. Turtle Beach intends to refresh the Neat Microphones catalog this year, targeting the home market, which has seen a significant growth spurt caused by the global pandemic, with products for streaming, gaming, podcasting, recording, teaching, and audio conferencing.

Publicly-Traded Esports Companies Raise Operating Capital

Canadian esports and media company Enthusiast Gaming Holdings upsized a previously announced bought deal financing. In total, the offering will generate $51M ($40.41M) in gross proceeds. As part of the offering, Enthusiast Gaming offers 6.42M shares from its treasury and will receive approximately $36.9M ($29.24M) in gross proceeds. The remaining 2.45M shares are offered by a selling shareholder, Blue Ant Media, which will receive gross proceeds of roughly $14.1M ($11.17M). Enthusiast Gaming intends to use the net proceeds from its part of the offering “for future acquisitions, working capital, and general corporate purposes.”

Esports community and content platform Super League Gaming announced the sale of 3,076,924 shares of its common stock at a price of $2.60 per share and disclosed that the transaction was expected to close on or about Jan. 13. Gross proceeds from the sale, before expenses, were expected to be approximately $8M. Super League Gaming intends to use the offering’s net proceeds for “working capital and general corporate purposes, including sales and marketing activities, product development, and capital expenditures.”

Other Investments

Game live streaming and community platform Turnip has raised a $1.63M seed financing round led by early-stage venture investment firm Elevation Capital with participation from Better Capital’s CEO and founder Vaibhav Domkundwar. The Bengaluru, India-based startup plans to use the investment proceeds to expand its reach and hiring talent.

Online esports content portal closed its crowd equity fundraising campaign and raised $1.07M from more than 2.5K individual investors. The campaign, which was launched in September 2020, was realized on OpenDeal’s private investing platform Republic. Juked revealed that it intends to use the campaign’s proceeds to grow its staff to accelerate the development of the company’s web product, apps, and original content offering.

Danish esports and gaming sponsorship and advertisement analytics firm Cavea raised a €1M EUR ($1.23M) financing round from new and existing investors with additional support from The Danish Growth Fund, Vækstfonden. The company is looking to use the additional funding to “consolidate and expand the product offering, grow the team, and put full focus on commercialization.”

Nations Ventures, a venture capital fund majority-owned by esports apparel company We Are Nations, invested in Australia-based influencer merchandise and media company HYPR CARRY. As part of the deal, Nations Ventures made a cash investment in the company and established a wholly-owned U.S. subsidiary, which will be a new affiliate of We Are Nations.

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