October 23, 2021

Volume XI, Number 296

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Top Esports Deals and Investments in 2020 and 2021

Despite the coronavirus pandemic, the esports community has witnessed an explosive year of investment growth in 2020 and early 2021.  Here is a brief summary of just some of the more significant esports acquisitions and investment transactions over the past year.

As for significant investments, in August 2020, Bitkraft Ventures, a worldwide esports venture capital firm, raised $165 million to invest across esports, gaming, and interactive entertainment, closing well above its initial target of $125 million.  The Bitkraft fund was backed by investment firms including Carolwood, Declaration Partners and JS Capital, and corporate investors Logitech, and Advance.  Jen Hilgers, founding partner of Bitkraft, commented:  “At Bitkraft, we don’t just support forward-thinking entrepreneurs with capital, but also provide experience, resources, and our global network.”  Bitkraft seems well-poised to continue its influence on the esports world.

In September 2020, the Mobile Premier League (MPL), Asia’s largest mobile gaming and esports platform, raised $90 million in its Series C round.  The round was led by SIG and early-stage tech investors RTP Global, MDI Ventures, and Pegasus Tech Ventures.  Existing investors Sequoia India, Base Partners, and Go-Ventures also participated.  Sai Srinivas, MPL’s CEO and co-founder, said in a public statement:  “In a short time, MPL has taken the gaming market by storm with our various offerings and partnerships, which have helped us stand out in the industry.  This latest round of funding will enable us to entertain and connect an even larger audience across India and beyond.”  The Series C round brought MPL’s total funding to $130.5 million after previously raising $40.5 million.  MPL boasts a growing base of over 60 million users and has recorded over 2 billion cash transactions on the app to date[1]—a huge and growing platform in the world’s most populous continent that seems well worth the investment.

In October 2020, VSPN closed a $100 million Series B funding round, led by Tencent, Tiantu Capital, SIG, and Kuaishou.  Founded in 2016, VSPN specializes in content creation and organizing esports tournaments and has partnered with over 70% of Chinese esports tournaments.[2]  “Tencent is glad to support VSPN,” said Mars Hou, the General Manager of Tencent Esports.  “VSPN’s long-term company vision and leading position in esports production are vital for Tencent to optimize the layout of the esports industry’s development.”  VSPN runs high-tier competitions in China for PUBG, Clash Royale, League of Legends, FIFA, and other games, so this appears to be another well-designed investment.

Also in October 2020, Guild Esports,  which is based in London and co-owned by soccer star David Beckham, completed its public market flotation on the London Stock Exchange with a market capitalization of €41.2 million ($52.3 million)—an impressive achievement since Guild Esports only launched in June 2020.  The transaction was led by brokers Zeus Capital and Miraband Securities.  The money will be invested in branding, recruitment, and scaling into various esports, including Rocket LeagueFortniteCS:GO, and FIFA.  Guild is the first esports franchise to join the LSE and is further evidence that esports’ reach on a global scale.

The Malta-based gambling firm Esports Entertainment Group (EEG) entered into an agreement to acquire Helix eSports and B2B software provider ggCircuit in October 2020 in a deal valued at approximately $43 million.  Helix eSports operates five gaming centers in the U.S., while ggCircuit provides a cloud-based management system, tournament platform, and integrated point-of-sale solutions for enterprise customers.  EEG has more than 1,000 connected locations, with clients ranging from GameStop, Dell, and Best Buy, as well as several North American universities.  This Helix/ggCircuit deal should strengthen EEG’s market position yet further.

The last major transaction in October 2020 was the gaming and entertainment live-streaming network VENN announcing the closing of a $26 million Series A financing round.  The round was led by seed-round investor Bitkraft and Nextstar Media Group, Eldridge, Wise Ventures, and others.  “With this new funding round, VENN is positioned for its next phase of growth as we plan to further expand our content creation capabilities and continue to enhance the distribution of our ‘instant and everywhere’ viewing experience,” commented Ben Kusin, VENN’s CEO and co-founder.  VENN is a 24/7 network for gaming, streaming, esports, and entertainment audiences across a wide range of media platforms, including YouTube, the Roku Channel, and others.  While not as large as other recent deals, this Series A round seems well-timed to help VENN’s continued growth as a broad-based gaming platform.

As for significant acquisitions, in December 2020, game developer and publisher Electronic Arts (EA) reached an agreement to acquire the U.K.-based racing game developer and publishers Codemasters in a deal valued at an estimated $1.2 billion.  The deal overturned a previous deal by which rival Take-Two Interactive had agreed to acquire Codemasters for approximately $971 million last year.  Codemasters is primarily known for its Formula One and Dirt racing games, and the acquisition will complement EA’s popular racing game Need for Speed.  This combination has arguably created the world’s leader in racing-related games.

More recently, in March 2021, the Chinese technology company and TikTok owner ByteDance announced the acquisition of Moonton, the game developer behind Mobile Legends: Bang Bang through its affiliate Nuverse in a deal valued at approximately $4.06 billion.  Tencent had apparently also made a bid for Moonton, which ByteDance subsequently matched.

Against this backdrop, the dramatic investment and growth in the esports ecosystem are well-poised to continue unabated.

[1] SeeMPL raises $90m Series C funding – UKTN (UK Tech News)

[2] SeeTencent leads $100M Series B funding round into China-based esport provider VSPN (msn.com)

Copyright © 2021, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume XI, Number 148
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About this Author

James Fazio Intellectual Property Attorney Sheppard Mullin Law Firm
Special Counsel

James Fazio is special counsel in the Intellectual Property Practice Group in the firm's San Diego (Del Mar) office.

Areas of Practice

James focuses on intellectual property and business litigation. He represents public and private companies in disputes such as those involving patent and trademark infringement, theft of trade secrets, fraud, breach of contract, unfair competition, false advertising and various business tort claims. James has more than 24 years of litigation experience and was selected by his peers among the top ten intellectual property...

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