The burgeoning eSports industry is spawning new startups like Matcherino that help support a growing ecosystem, and investors are taking notice.
Seattle-based Matcherino raised another $1.5 million this week from previous backers Madrona Venture Group and Vulcan Capital, along with other angel investors. Bend, Ore.-based Seven Peaks Ventures also invested for the first time.
Founded in 2015, Matcherino has developed a platform that lets eSports fans crowdfund competitions between top gamers, who can then get paid for their matches and interact with followers. Many eSports fans are willing to pay to see the best compete, much like people do with traditional sports. Matcherino enables them to win rewards and prizes in exchange for helping grow a given prize pool.
Matcherino CEO Grant Farwell likened the company’s software to an escrow system for eSports tournament prize pools. With traditional eSports tournaments, it can often take a long time to pay out winnings and many gamers don’t receive the proper amount, he said. Matcherino, which integrates with platforms like PayPal and Twitch, lets users see exactly how much money is available and allows pool organizers to easily control the distribution of funds.
“Transparency is pretty big in eSports,” Farwell told GeekWire. “Before us, the prize pools were being completely mismanaged by event organizers, who are often young due to the nature of the industry and don’t handle money well. Transparency adds a needed element to this ecosystem.”
Matcherino, which graduated from Techstars Seattle in 2015, makes money by taking a cut of each prize pool — and so the larger the pool, the more revenue it earns. Larger pools also benefit the gamers themselves, as well as tournament organizers.
To help increase prize pool amounts, Matcherino also acts as somewhat of a Kickstarter for eSports matches. The platform allows tournament organizers to sell items or products to fans, with that money going toward the prize pools. The startup also runs a sponsorship store, which lets event organizers sell pre-made rewards from sponsors — like gaming keyboards from Razer or a jersey from a popular eSports team, for example.
“Before, the prize pool money was in different silos, depending on how you organized your event,” Farwell said. “Now these organizers can put the base prize pool on our platform; they can do all the ticketing with us; they can sell merchandise with us. They are doing essentially everything related to money with us, and we help to make sure it goes to the correct people.”
Matcherino is seeing traction — it has doubled the number of dollars coming into the platform over the past several quarters. The company plans to help run 350 tournaments this month. It also recently worked with Microsoft to facilitate a $200,000 Gears of War tournament.
“We are becoming the standard in a lot of different communities,” Farwell noted.
Matcherino has positioned itself in a fast-growing eSports industry that could produce $1.5 billion in revenues by 2020. In her annual Internet Trends report for 2017, Mary Meeker noted that an equal number of millennials prefer eSports to traditional sports. She also noted that eSports viewership is up 40 percent since last year.
Matcherino has raised $2.75 million to date. The company employs eight people, including CTO and co-founder Mario Gutierrez, who was formerly a chief architect at First American Bank.