Sports

Northzone’s Paul Murphy goes deep on the next era of gaming

Posted by | Amazon, Angry Birds, Candy Crush, Electronic Arts, esports, Gaming, Google, King, league of legends, Media, mobile gaming, Netflix, Nintendo Switch, Paul Murphy, Rovio, Sports, stadia, Startups, Steam, supercell, Talent, TC, Tencent, unity-technologies, Venture Capital, Virtual reality | No Comments

As the gaming market continues to boom, billions of dollars are being invested in new games and new streaming platforms vying to own a piece of the action. Most of the value is accruing to the large incumbents in a space, however, and the entrance of Google and other big tech companies makes it difficult to identify where there are compelling opportunities for entrepreneurs to build new empires.

TechCrunch media analyst Eric Peckham recently sat down with Paul Murphy, Partner at European venture firm Northzone, to discuss Paul’s view of the market and where he is focusing his dollars. Below is the transcript of the conversation (edited for length and clarity):


Eric Peckham: You co-founded the hit mobile game Dots before moving to London and joining Northzone last year. Are you still bullish on investment opportunities in mobile gaming or do you think the market has changed?

Paul Murphy: I’m bullish on mobile gaming–the market is bigger than it has ever been. There’s a whole generation of people that have been trained to play games on mobile phones. So those are things that are very positive.

The challenge is you don’t really have a rising tide moment anymore. The winners have won. And so it’s very, very difficult for someone to enter with new content and build a business that’s as big as Supercell or King, regardless of how good their content is. So while the prize for winning in mobile gaming content big, the likelihood is smaller.

Where I’m spending most of my time is not on content, it’s on components within mobile gaming. We’re looking at infrastructure: different platforms that enable mobile gaming, like Bunch which we invested in.

Their product allows you to do live video and audio on top of mobile games. So we don’t have to take any content risk. We’re betting that this great product will fit into a large inventory ecosystem.

Peckham: New mobile game studios that are launching all seem to fall under the sphere of influence of these bigger companies. They get a strategic investment from Supercell or another company. To your point, it’s tough for a small startup to compete entirely on its own.

Murphy: It’s possible in mobile gaming still but it’s really, really hard now. At the same time, what you’ve seen is the odds of winning are lower. It is hard to reach the same scale when it costs you $5.00 to acquire a user today, whereas when Candy Crush launched, it was $0.05 per user. So it’s almost impossible to achieve King-like scale today.

Therefore, you’re looking at similar content risk with reduced upside, which makes that equation less attractive for venture capital. But it might be perfectly fine for an established company because they don’t need to do the marketing, they have the audience already.

The big gaming companies all struggle with the challenge of how to create the next hit IP. They have this machine that can bring any great game to market efficiently, with a large audience they can cross promote from and capital they can invest to build a big brand quickly. For them, the biggest challenge is getting the best content.

So it’s natural to me that the pendulum has swung towards strategic investors in mobile gaming content. Epic has a fund that they set up with Improbable, Supercell is making direct investments, Tencent has been making investments for years. Even from a content perspective, you’re probably going to see Apple, Google, and Amazon making more content investments in mobile gaming.

Image via Getty Images / aurielaki

Peckham: Does this same market dynamic apply to PC games and console games? Do you see a certain area within gaming where there’s still opportunity for independent startups to create the game itself and find success at a venture scale?

Murphy: The reason we made our investment in Klang Games, which is building an MMO called Seed that people will primarily play through PC, is that while there is content risk–you’re never going to get rid of the possibility that the IP doesn’t fly–if it works, it will be massive…an Earth-shattering level of success. If their vision comes to life, it will be very, very big.

So that one has all the risks that you’d have in any other game studio but the upside is exponentially larger, so the bet makes sense to us. And it so happens that it’s going to be on PC first, where there’s certainly a lot of competition but it’s not as saturated and the monetization methods are healthier than in mobile gaming. In PC, you don’t have to do free-to-play tactics that interfere with the gameplay.

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Amazon’s Twitch acquired social networking platform Bebo for up to $25M to bolster its esports efforts

Posted by | Amazon, Apps, Bebo, esports, Gaming, M&A, Social, Sports, tournaments, Twitch | No Comments

While Facebook makes a bold move into cryptocurrency to capitalise on its multi-billion user base, a social network that was once a credible competitor to it has quietly been snapped up by a subsidiary of Amazon. TechCrunch has learned and confirmed that Bebo, one of the earlier platforms to let people share thoughts and media with their friends, has been acquired by Twitch, the streaming video platform owned by Amazon. Together the two will be working on building out Twitch’s esports business, and specifically Twitch Rivals.

A spokesperson for Twitch confirmed the acquisition, which includes both people (around 10 employees) and IP, but declined to provide further comment.

From what we understand from our sources, Twitch paid up to $25 million for the company earlier this month, after beating out at least two other bidders, Discord (which itself has been building out its own esports business), and… wait for it… Facebook. (Our source says the latter offered $20 million.) Indeed, LinkedIn profiles for ex-Bebo employees — see here, here, and here — now at Twitch note June as the changeover date. (Note: original sources say $25 million, others close to the deal say it was materially less than this. As you know, these things can be described differently depending on who is doing the describing.)

It has been a long and winding road for Bebo over the years. Starting out way back in 2005 by Michael and Xochi Birch as an early social networking site, Bebo quickly became the market leader in a couple of English-speaking countries, specifically UK and Ireland.

Bebo’s growth trajectory and the bigger opportunity in social were enough to get it acquired for about $850 million by AOL back in 2008, apparently beating out a number of other interested large tech and media companies interested in getting their own social media platform and the audience that would come with it (disclaimer: AOL eventually also acquired TechCrunch, too).

But the deal was a certifiable dud, with Bebo never managing to build on its early traction, and AOL not being in a position to know how to fix that. Less than two years later, it was sold on to Criterion Capital for $25 million.

Yet as the social wheels continued to turn, and even once-global market leader MySpace also fell back as Facebook, Twitter, Instagram and other mobile-friendly platforms pulled out ahead, even that $25 million price turned out to be too high. After Bebo filed for Chapter 11 bankruptcy protection, the original founders, the Birches, bought it back in 2013 for $1 million with a pledge to reinvent it.

And so they did, putting in place a small team led by Shaan Puri, who worked on a number of ideas to see which of them could fly. (And I don’t know if this was a tongue in cheek joke about how challenging they knew the task would be, but it seems that the holding company set up to house some of the IP and legal aspects of the endeavor was called “Pigs in Flight.”)

The new app studio effort, which went by the name Monkey Inferno (another great one), came out of the gates with “Blab”, a “walkie-talkie” ephemeral video messaging service, which picked up millions of users quickly but found it hard to retain them. It shut down a year later, and it looks like Monkey Inferno dabbled in a few other things before coming to esports.

From social networking to socialising esports

In that last pivot, Bebo first tried out streaming services for esports players, but that proved to be tough competition against dominant platforms like OBS and Xsplit. Then, in an interesting nod to its earlier history in social networking and organising groups of friends, it shifted once more, into organising and running tournaments for streamers, with leagues and more: the streams ran on Twitch and Bebo organised viewers, leagues and other things around that.

That site, Bebo.com, is now offline, and all its tweets seem to have been deleted, but the idea was to build out leagues and tournaments for any and all kinds of groups and players, for example complete beginners, or high school students.

It was the last of these that turned out to line up with a growing market segment.

According to a report in eMarketer, esports attracted some 400 million users in 2018 and pulled in revenues of $869 million from sponsorships, player fees and advertising, and it is projected to be worth between $1.58 billion and $2.96 billion by 2022. And Bebo was helping organise and build those communities.

And that is now linking up neatly with Twitch, which had been developing its own casual esports operation in the form of Twitch Rivals. This launched in beta in 2018 and is now widely available wherever Twitch is.

The Bebo tech and its team are now both being put to use on Twitch Rivals, to help continue expanding it with more features and more users. To be clear, though, it seems there is no intention — from what I understand — to parlay Bebo’s past efforts in social networking into a wider social networking play at Twitch: the focus is on esports.

Still, the acquisition comes at a key moment. Since January, there have been reports that Amazon is working on a new game streaming service (just like Apple, Google and others), which likely won’t be out until next year. While there is no news on that today, you can see how expanding the variety and breadth of content on Twitch by way of esports leagues and tournaments fits in with a wider effort to bring more regular, engaged users into the Amazon fold, using this as one of the big draws.

(Updated with more detail on the price.)

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Delane Parnell’s plan to conquer amateur esports

Posted by | accelerator, Alexis Ohanian, Amazon, Apps, Brian Wong, Canada, coach, delane parnell, detroit, esports, Facebook, Fundings & Exits, Gaming, league of legends, Los Angeles, Ludlow Ventures, Matt Mazzeo, Media, national basketball association, north america, Personnel, Peter Pham, playvs, Riot Games, rocket fiber, Rocket League, science, serial entrepreneur, Sports, Spotify, Startups, Talent, TC, Twitch, United States, Venture Capital, video game | No Comments

Most of the buzz about esports focuses on high-profile professional teams and audiences watching live streams of those professionals.

What gets ignored is the entire base of amateurs wanting to compete in esports below the professional tier. This is like talking about the NBA and the value of its sponsorships and broadcast rights as if that is the entirety of the basketball market in the US.

Los Angeles-based PlayVS (pronounced “play versus”) wants to become the dominant platform for amateur esports, starting at the high school level. The company raised $46 million last year—its first year operating—with the vision that owning the infrastructure for competitions and expanding it to encompass other social elements of gaming can make it the largest gaming company in the world.

I recently sat down with Founder & CEO Delane Parnell to talk about his company’s formation and growth strategy. Below is the transcript of our conversation (edited for length and clarity):

Founding PlayVS

Eric P: You have a fascinating background as a serial entrepreneur while you were a teenager.

Delane P.: I grew up on the west side of Detroit and started working at the cell phone store of a family friend when I was 13. When I turned 16 or so, I joined two guys in opening our own Metro PCS franchise. And then two additional franchises. And I was on the founding team of a car rental company called Executive Rental Car.

Eric P: And this segued into tech startups after meeting Jon Triest from Ludlow Ventures?

Delane P: He got me a ticket to the Launch conference in SF, and that experience inspired me to start a Fireside Chat series in Detroit that brought in people like Brian Wong from Kiip and Alexis Ohanian from Reddit to speak. Starting at 21, I worked at a venture capital firm called IncWell based in Birmingham, Michigan then joined a startup called Rocket Fiber.

We were focused on internet infrastructure – this is 2015-ish – and I was appointed to lead our strategy in esports. So I met with many of the publishers, ancillary startups, tournament organizers, and OG players and team owners. Through the process, I became passionate about esports and ended up leaving Rocket Fiber to start a Call of Duty team that I quickly sold to TSM.

Eric P: What then drove you to found PlayVS? Did it seem like an obvious opportunity or did it take you a while to figure it out?

Delane P.: What esports means is playing video games competitively bound to governance and a competitive ruleset. As a player, what that experience means is you play on a team, in a position, with a coach, in a season that culminates in some sort of championship.

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Pro gamer Tfue files lawsuit against esports org over ‘grossly oppressive’ contract

Posted by | esports, faze clan, Gaming, lawsuit, Sports, Startups, Talent, TC, tfue, Twitch, YouTube | No Comments

Turner “Tfue” Tenney, one of the world’s premier streamers and esports pros, has filed a lawsuit against esports organization Faze Clan over a “grossly oppressive, onerous and one-sided” contract, according to THR.

The complaint alleges that Faze Clan’s Gamer Agreement relegates up to 80% of the streamer’s earnings from branded content (sponsored videos) to Faze Clan, and that the contract hinders Tfue from pursuing and earning money from sponsorship deals that Faze Clan hasn’t approved.

Tfue’s lawyer, Bryan Freedman of Freedman + Taitelman, took the complaint to the California Labor Commissioner with issues that span far beyond financial contracts. Freedman wrote that Faze Clan takes advantage of young artists and actually jeopardizes their health and safety, noting an incident where Tfue was allegedly pressured to skateboard in a video and injured his arm. Freedman also wrote that Faze Clan pressured Tfue to live in one of its homes where he was given alcohol before being 21 years old, and encouraged to illegally gamble.

From the complaint:

In one instance, Tenney suffered an injury (a deep wound that likely required stitches) which resulted in permanent disfigurement. Faze Clan also encourages underage drinking and gambling in Faze Clan’s so-called Clout House and FaZe House, where Faze Clan talent live and frequently party. It is also widely publicized that Faze Clan has attempted to exploit at least one artist who is a minor.

Faze Clan issued the following statement on Twitter following the news:

A follow-up from FaZe Clan on today’s unfortunate situation. pic.twitter.com/qm6sK8v88B

— FaZe Clan (@FaZeClan) May 21, 2019

Faze Clan claims that it has taken no more than 20% of Tfue’s earnings from sponsored content, which amounts to a total of $60,000. The owner of Faze Clan, Ricky Banks, took to Twitter to make his case, showing the incredible growth of Tfue’s popularity across Twitch and YouTube since signing with Faze Clan.

I recruited Tfue to FaZe Clan in April of 2018. These are graphs from both his YouTube & Twitch channels following the mark of our relationship. pic.twitter.com/c7m3QwsoTZ

— FaZe Banks (@Banks) May 20, 2019

As it stands now, Tfue boasts more than 120 million views on Twitch, more than 10 million YouTube subscribers and 5.5 million followers on Instagram.

Banks also reiterated Faze Clan’s official statement saying that the company has taken 20% of Tfue’s earnings from branded deals, totaling $60,000.

OK LAST TWEET – To clarify Turners contract does outline splits in prizes, ad revenue, stuff like that. But again we’ve collected absolutely none of it with no plans to and that was very clear to him. We have collected a total of $60,000 from 300k in brand deals (20%). That’s it

— FaZe Banks (@Banks) May 20, 2019

The Tfue claim, however, seems to take issue with the content of the agreement, not necessarily its execution, and the general legality of these types of gamer agreements across the esports landscape. Moreover, the complaint alleges that Tfue lost potential earnings due to his agreement with Faze Clan and their own conflicts of interest with various brands interested in a sponsorship.

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Hotstar, Disney’s Indian streaming service, sets new global record for live viewership

Posted by | 21st century fox, Amazon, Asia, cricket, Disney, Entertainment, Facebook, india, Media, Mobile, Netflix, Sports, streaming service | No Comments

Indian video streaming giant Hotstar, owned by Disney, today set a new global benchmark for the number of people an OTT service can draw to a live event.

Some 18.6 million users simultaneously tuned into Hotstar’s website and app to watch the deciding game of the 12th edition of the Indian Premier League (IPL) cricket tournament. The streaming giant, which competes with Netflix and Amazon in India, broke its own “global best” 10.3 million concurrent views milestone that it set last year.

Update at 11:30 p.m. Pacific on May 13: In a statement, Hotstar confirmed that 18.6 million users simultaneously watched the game on its platform over the weekend. “The achievements of this season once again bear witness to Hotstar being the most preferred sports destination for the country. With technology as our backbone and our all-round expertise in driving scale, we are confident we will continue to break global records and set new benchmarks with each passing year,” said Varun Narang, chief product officer of Hotstar.

Hotstar topped the 10 million concurrent viewership mark a number of times during this year’s 51-day IPL season. More than 12.7 million viewers huddled to watch an earlier game in the tournament (between Royal Challengers Bangalore and Mumbai Indians), a spokesperson for the four-year-old service said. Hotstar said the cricket series had over 300 million overall viewership, creating a new record for the streamer. (Last year’s IPL clocked a 202 million overall viewership.)

Fans of Mumbai Indians celebrate their team’s victory against Chennai Super Kings in IPL cricket tournament in India

These figures coming out of India, the fastest-growing internet market, are astounding, to say the least. In comparison, a 2012 live stream of skydiver Felix Baumgartner jumping from near-space to the Earth’s surface remains the most concurrently viewed video on YouTube. It amassed about 8 million concurrent viewers. The live viewership of the royal wedding between Prince Harry and Meghan Markle was also a blip in comparison.

As Netflix and Amazon scramble to find the right content strategy to lure Indians, Hotstar and its local parent firm Star India have aggressively focused on securing broadcast and streaming rights to various cricket series. Cricket is almost followed like a religion in India.

In 2017, Star India, then owned by 21st Century Fox, secured the rights to broadcast and stream the IPL cricket tournament for five years for a sum of roughly $2.5 billion. Facebook also participated in the bidding, offering north of $600 million for streaming. (Star India was part of 21st Century Fox’s business that Disney acquired for $71.3 billion earlier this year.)

That bet has largely paid off. Hotstar said last month that its service has amassed 300 million monthly active users, up from 150 million it reported last year. In comparison, both Netflix and Amazon Prime Video have less than 30 million subscribers in India, according to industry estimates.

In the last two years, Hotstar has expanded to three international markets — the U.S., Canada and, most recently, the U.K. — to chase new audiences. The streaming service is hoping to attract Indians living overseas and anyone else who is interested in Bollywood movies and cricket, Ipsita Dasgupta, president of Hotstar’s international operations, told TechCrunch in an interview. The streaming service plans to enter more nations with high density of Indians in the next few quarters, Dasgupta said.

That’s not to say that Hotstar has a clear path ahead. According to several estimates, the streaming service typically sees a sharp decline in its user base after the conclusion of an IPL season. Despite the massive engagement it generates, it remains operationally unprofitable, people familiar with Hotstar’s finances said.

The ad-supported streaming service offers about 80 percent of its content catalog — which includes titles produced by Star India — for no cost to users. It also syndicates shows and movies from international partners such as HBO, ABC and Showtime — though these titles are available only to paying subscribers. One of the most watched international shows on the platform, “Game of Thrones,” will be ending soon, too.

The upcoming World Cup cricket tournament, which Hotstar will stream in India, should help it avoid the major headache for some time. In the meantime, the service is aggressively expanding its slate of original shows in the nation. One of the shows is a remake of BBC/NBC’s popular “The Office.”

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Where top VCs are investing in media, entertainment & gaming

Posted by | Apple, BetaWorks, charles hudson, Electronic Arts, Entertainment, epic games, Eric Hippeau, esports, Facebook, fortnite, founders fund, funding, Fundings & Exits, Gaming, Google, GV, HQ Trivia, instagram, interactive media, lerer hippeau ventures, lightspeed venture partners, Luminary Media, matt hartman, Media, mg siegler, Netflix, new media, precursor ventures, Roblox, scooter braun, sequoia capital, Sports, Spotify, starbucks, Startups, sweet capital, TC, Twitch, Venture Capital, Video, Virtual reality | No Comments

Most of the strategy discussions and news coverage in the media and entertainment industry is concerned with the unfolding corporate mega-mergers and the political implications of social media platforms.

These are important conversations, but they’re largely a story of twentieth-century media (and broader society) finally responding to the dominance Web 2.0 companies have achieved.

To entrepreneurs and VCs, the more pressing focus is on what the next generation of companies to transform entertainment will look like. Like other sectors, the underlying force is advances in artificial intelligence and computing power.

In this context, that results in a merging of gaming and linear storytelling into new interactive media. To highlight the opportunities here, I asked nine top VCs to share where they are putting their money.

Here are the media investment theses of: Cyan Banister (Founders Fund), Alex Taussig (Lightspeed), Matt Hartman (betaworks), Stephanie Zhan (Sequoia), Jordan Fudge (Sinai), Christian Dorffer (Sweet Capital), Charles Hudson (Precursor), MG Siegler (GV), and Eric Hippeau (Lerer Hippeau).

Cyan Banister, Partner at Founders Fund

In 2018 I was obsessed with the idea of how you can bring AI and entertainment together. Having made early investments in Brud, A.I. Foundation, Artie and Fable, it became clear that the missing piece behind most AR experiences was a lack of memory.

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Zwift CEO Eric Min on fitness-gaming and bringing esports into the Olympics

Posted by | cycling, eCommerce, Entertainment, esports, Gaming, Media, Peloton, SaaS, Sports, Strava, TC, Zwift | No Comments

The rumored IPO plans of $4 billion spinning brand Peloton marks the rise of a wave of interactive fitness startups like Mirror, Tonal, Hydrow and At Home 360 that combine a monthly subscription to recorded and/or live video classes with workout hardware.

There’s opportunity beyond this initial “Peloton for X” model, however, when you look at where the gamification of at-home workout experiences can overlap with actual games. We’re in the midst of rapid growth in the gaming industry, the rise of esports and the mainstream-ing of socializing within games due to Fortnite

The virtual cycling business Zwift is a five-year-old startup that has raised more than $170 million as a pioneer of fitness-gaming ― physical sport carried out in a virtual world. Athletes join together for group rides and races within a cycling game that hooks up to their own bike trainers at home in order to reflect their movements and physical exertion. Because users are represented as players within a social game, there is the benefit of network effects, opportunity for in-game commerce and an audience viewing the competition.

I recently sat with Eric Min, Zwift’s CEO and co-founder, at the company’s London office. We discussed why he founded Zwift and how the product has evolved, the potential revenue streams available to an interactive fitness brand and Zwift’s rise as an esport with ambitions to enter the Olympics. Here’s the transcript:

Eric Peckham (TechCrunch): Do you view Zwift as a fitness company or as a gaming company where the bike trainer is just a controller?

Eric Min (Zwift): We’re the fitness company born out of gaming. While we’re a fitness brand, we’re also a game and social network, two things that are converging rapidly right now. What we’re trying to do, though, is build this social network around real-time experiences, physical experiences, and I think that’s far more interesting. Crucial to that is being hardware-agnostic though. We work with a lot of equipment out there so our users can come to the game easily.

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Drake invests in esports betting startup Players’ Lounge

Posted by | Drake, esports, Gaming, online gambling, players lounge, Recent Funding, Sports, Startups, TC | No Comments

Drake’s latest collaboration isn’t with Kanye or Kendrick, it’s with Marissa Mayer.

The rap superstar has joined a bevy of Silicon Valley investors, including Strauss Zelnick, Comcast, Macro Ventures, Canaan, RRE, Courtside and Marissa Mayer, to fund Players’ Lounge, an esports startup looking to pit gamers against each other in their favorite titles with some friendly wagers on the line.

The startup has just announced that it closed $3 million in funding.

The company, which has been around for five years, got its start as an esports startup looking to organize real-life matches at bars in New York City to play FIFA. That’s obviously not the most scalable business of all time, but last year after joining Y Combinator, the company really dove into a new model that looked to create an online hub for gamers to battle each other in titles of their choosing, with money on the line.

The company has a heavy emphasis on sports titles, like FIFA 19, NBA 2K19 and Madden 19, but there are also some heavy hitters like Fortnite, Apex Legends and Super Smash Bros. Ultimate.

Gamers can set a match or join one in head-to-head challenges or in massive 500-person tournaments. The wagers are often a buck or two but can swell much higher. Players’ Lounge takes 10 percent of the bets as a fee. Because it’s a game of skill, not chance, there aren’t many issues with gambling regulations, though a few states still don’t allow the service, the company says.

The startup plans to use their new cash to beef up their library of playable games and add to their development team.

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Sapphire Ventures bets big on esports and entertainment with new $115M fund

Posted by | Adidas, Entertainment, fitbit, Gaming, major league baseball, new york jets, Paytm, San Jose Sharks, Sapphire Ventures, Sinclair Broadcast Group, Sports, Startups, TC, tom brady, Venture Capital | No Comments

Sapphire Ventures, formerly the corporate venture capital arm of SAP, has lassoed $115 million from new limited partners (LPs) to invest at the intersection of tech, sports, media and entertainment.

A majority of the LPs for the new fund, called Sapphire Sport, have ties to the sports industry, from City Football Group, which owns English Premier League team Manchester City, to Adidas, the owners of the Indiana Pacers, New York Jets, San Jose Sharks and Tampa Bay Lightning, among others.

The firm plans to do five to six investments per year, sized between $3 million and $7 million. So far, they’ve deployed capital to five startups: at-home fitness system Tonal, live soccer streaming platform mycujoo, digital sports network Overtime, ticketing and events platform Fevo and gaming studio Phoenix Labs. Sapphire began backing tech startups in 2008; in 2016, the firm closed on $1 billion for its third flagship venture fund.

Sapphire managing director and co-founder Doug Higgins is leading the effort alongside newly tapped partner Michael Spirito, who joined from 21st Century Fox, where he focused on business development and digital media for the Fox Sports-owned Yankees Entertainment and Sports (YES) Network, in September.

Higgins was an investment manager at Intel Capital for four years prior to co-launching Sapphire. Throughout his career, he’s managed the firm’s investments in LinkedIn, DocuSign, Square and more.

“We invest in anything that tech is disrupting,” Higgins told TechCrunch. “We were early investors in Fitbit, so we saw the beginning of digital fitness and how tech can impact the lives of anyone, not just high-performance athletes … We are also investors in Square, TicketFly and Paytm and what we’ve been seeing — the dream as a VC — is these massive markets in the sports, media and digital health world that are getting disrupted by tech.”

Sapphire is betting its traditional and well-established venture platform, coupled with the expertise of leading sports entities on board as LPs, will give it a competitive edge as it targets some of the best emerging sports tech companies.

“We see a lot of FOMO happening in this world, where everyone wants to have a play, but to make the best investment you need to have the widest perspective,” Higgins said. “So if you’re a team owner of a particular football team you are going to make better decisions if you are able to share perspectives with owners of other teams.”

“The best entrepreneurs, the ones we all want to invest in, there’s not a draft, they have to select you,” he added.

Investment in esports and gaming has skyrocketed, surpassing a total of $2.5 billion in VC funding in 2018. According to PitchBook, a handful of startups have already raised a total of $65 million in VC backing this year, including a $10.8 million financing for ReKTGlobal, a provider of esports infrastructure services.

“You can’t ignore the numbers on esports,” Higgins added. “They just continue to grow massively and people who have teenage kids, like myself, [those kids] want to grow up to be the next ninja, not the next Tom Brady .”

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With investors knocking, PlayVS opens the door to a $30M Series B

Posted by | delane parnell, esports, funding, Gaming, playvs, Sports, Startups, TC | No Comments

PlayVS, the company bringing esports infrastructure to high schools across the country, has today announced the close of a $30.5 million Series B financing. The round was led by Elysian Park Ventures, the investment arm of the L.A. Dodgers, with participation from five existing investors, including New Enterprise Associates, Science Inc., Crosscut Ventures, Coatue Management and WndrCo.

New investors also joined in on the round, including Adidas (the company’s first esports investment), Samsung NEXT, Plexo Capital, as well as angel investors such as Sean “Diddy” Combs, David Drummond, DST Global partner Rahul Mehta, Michael Dubin and others.

It’s certainly worth noting that PlayVS raised a $15 million Series A just six short months ago. Founder and CEO Delane Parnell explained that this Series B was an opportunistic raise, as the company received a lot of inbound from investors to get a slice of the next round.

“This gives us much more stability and runway so that we can hire more senior employees and leadership,” said Parnell. “It also gives us a bit of a war chest to let the team go out and work their strategies.”

Alongside the raise, PlayVS also announced new game partnerships, bringing Rocket League and SMITE into the company’s portfolio. Rocket League and SMITE join League of Legends, which was added to the platform two months ago.

PlayVS launched early this year with a relatively novel approach to the esports world. Instead of focusing on the current esports space, PlayVS realized there was a huge opportunity to bring infrastructure to the esports landscape in high school. As more and more esports careers are created through investment by colleges (via scholarships) and esports orgs, PlayVS gives students a place to show off their skills and get in front of recruiters.

The first step in the process was establishing a partnership between PlayVS and the NHFS, which is essentially the NCAA of high school sports. Through that partnership, PlayVS handles team schedules, district league schedules, coaching clinics and referees, and sets up an in-person live spectator event for the State Championship at the end of the year.

Right now, the company is in the midst of its Season Zero, testing out the platform with a small number of states — Connecticut, Georgia, Kentucky, Massachusetts and Rhode Island — in preparation for the official Inaugural Season, which will begin in 2019. Today, PlayVS is adding Alabama (AHSAA), Mississippi (MISSHSAA) and parts of Texas (TCSAAL).

But the growth of the company is largely dependent on states and school districts, which is why PlayVS is announcing the launch of Club Leagues. Club Leagues is identical to the PlayVS sports league product, except there is no State Championship at the end. Still, students who do not yet have access to the official PlayVS sports league can create teams, join up and play matches.

Eventually, Parnell says, the company will phase out Club Leagues as soon as official sports leagues are available to those players.

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