27 Dec Angels and Unicorns: Top esports investments, mergers and acquisitions of 2021
Image credit: ESI
The best way to paint a picture of an industry is to use numbers. For years, almost all mentions of the esports industry in mainstream media revolved around big prize pools of tournaments such as The International, but true as that might be, there’s more to the industry than prize pools.
Any team relying exclusively on tournament winnings is not going to go very far, and a good business development strategy, network and pitching processcan arguably help a team more than a good roster. Cash does, in fact, rule everything around us.
The value of a number of esports organisations has been on the rise in 2021, and one company even reached a unicorn valuation of over $1bn. FaZe Clan, the hypebeast-branded esports organisation, gaming brand and content powerhouse is now worth more than a billion dollars. Imagine that.
To show you how esports brands managed to grow at an unprecedented rate despite the pandemic, we present to you Angels and Unicorns, a feature recapping the biggest investments, mergers and acquisitions in the esports world.
From stock exchange listings to multi-million dollar investments and funding rounds, all the way to expansions, mergers and acquisitions — we had it all this year, despite the onslaught of COVID-19 variants that just won’t seem to dry out.
Showing us the money
Although we all love to believe in unicorn stories and rags-to-riches tales, the cold and hard truth is that you can’t do all that much without a steady stream of even colder and harder cash. And since esports organisations are still mostly young companies that have a more startup-minded approach to business, investments are the bread and butter of esports.
Without a doubt, the largest investment into an esports organisation was the $60m (~£45m) investment in North American esports and gaming brand 100 Thieves. The company is now one of the highest-valued entities in the esports industry, with a value of around $460m (~£345m).
Image credit: 100 Thieves
North America was on a roll this year. Apart from 100Thieves, Canada-based OverActive Media, the parent company of LEC champions MAD Lions and Toronto Ultra secured $40m in funding this year, and Misfits Gaming Group also raised another $35m in 2021.
Across the pond, EXCEL and Fnatic, two UK-based esports organisations, raised considerable cash this year. EXCEL boosted its finances with €20m, and Fnatic further strengthened its position with a $17m round earlier this year.
Those valuations come in part thanks to a successful year full of partnerships in esports — for more on that, check out ESI Features Editor Jake Nordland’s breakdown of the top esports partnerships and activations of 2021.
Going public is the way to go
Most of the world’s largest companies are publicly traded. So, for an esports brand to go live on a stock exchange is a considerable achievement. This is very well known to FaZe Clan, one of the top esports brands in the world, which, alongside its $1bn valuation, is now being traded on the NASDAQ stock exchange. The new publicly-traded company is called FaZe Holdings Inc.
Again, FaZe was not the only company deciding that now is the time to go public in the USA. OverActive Media was a bit late to the party but still started trading on the OTCQB Venture Market in November. Interestingly, OverActive Media started trading in Canada in July.
Image credit: OverActive Media Group
Enthusiast Gaming, owners of esports media outlet Upcomer, gaming website Destructoid and operators of a number of esports teams – also started trading publicly on NASDAQ. Astralis, a Danish esports organisation known for its CS:GO team first joined the NASDAQ First North Growth Denmark market last year, but followed up by applying to the OTC Markets Group’s Best Market Exchange in the United States.
We must mention Guild Esports, one of the first publicly traded esports companies, which expanded to the OTCQB this year, thus beginning the company’s journey in North America. Esports Technologies also held an IPO this year – for betting news, read ESI Sub-Editor Tom Daniels’ article In Play.
Sports come to esports
Although we’ve seen our share of athletes entering esports, either in content creating or C-level roles in the past, 2021 did not disappoint when it came to traditional sport players dipping their toes in esports. Esports is still a very interesting prospect for sport players that are familiar with the process of building teams, but want to secure themselves a revenue stream beside their career. The most known player to do so is, of course, David Beckham, whose Guild Esports became one of the first publicly-traded esports companies in 2020.
Starting with a duo of Manchester United players, we saw Jesse Lingard kickstart his esports involvement by forming JLINGZ Esports. Lingard’s new organisation acquired UK-based Audacity Esports and is set to compete in Rainbow Six: Siege and FIFA. While the Manchester United forward decided on his esports plans in the summer, his teammate David De Gea formed his own esports organisation a bit later. Called Rebels Gaming, de Gea’s organisation will compete in VALORANT, League of Legends and Rainbow Six Siege.
Image source: UKIN
All-star basketball player Kevin Durant also branched into esports by investing in New York esports organisation with his agent, Rich Kleiman. Circling back to Manchester United, the team’s former manager Ole Gunnar Solskjær and agent Jim Solbakken entered the esports world by becoming owners of Norwegian esports company ULTI Agency.
Esports organisations expanding
To grow is to enter new markets, and that sometimes means acquiring existing players in those markets. That’s exactly what Ninjas in Pyjamas did earlier in 2021 by announcing a merger with ESV5 and entering the LPL, the top Chinese League of Legends league. The Swedish brand was not the only new team in the LPL, though – Chinese social media giant Weibo also branched out in esports and acquired Suning’s LPL spot.
In Europe, one of the best-known League of Legends teams, Schalke04 Esports, sadly had to sell their spot in the LEC because of financial difficulties. But one team’s loss is another’s gain, and Team BDS saw an opportunity. The Swiss organisation successfully entered League of Legends by buying Schalke04’s slot for around €30m.
The North American market saw one of its biggest names, Complexity Gaming, acquired by GameSquare Esports for $27m (~£20m). GameSquare Esports is the parent company of esports agency Code Red Esports, and the acquisition made Complexity’s current ownership group the major shareholder of GameSquare Esports.
Image credit: OpTic Gaming / Envy gaming
In an interesting turn of events, two known North American organisations, OpTic Gaming and Envy Gaming, decided to merge and work together on a new Call of Duty League franchise. This, in turn, left the CoD League one team too short — that position was filled recently by Oxygen Esports. Oxygen Esports will work with New England Patriots’ The Kraft Group, the owners of Boston Uprising, to operate its Overwatch League and Call of Duty League franchises.
If all this talk about numbers, Euros, Pounds and Dollars has you itching for more esports info, check out our Head of Multimedia Kerry Waananen’s Heat Map article, where he details the hottest trends of the esports industry this year.
Commercial, Editors Picks, Features, Insights, Investments, M&A, B.Riley Principal 150 Merger Corp, Esports investment, esports mergers, esports unicorn, faze, mergers and acquisitions
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