Investors are putting more cash behind esports tournament operator Matcherino as questions swirl about how large the professional gaming industry will become.
Seattle-based Matcherino today announced an additional $1.5 million in funding as part of a “Series A-1” round. Galaxy Digital, a new firm that describes itself as a “bridge between the crypto and institutional worlds,” invested in the company for the first time, along with Wells Fargo Strategic Capital. Existing backers including Seven Peaks Ventures, Madrona Venture Group, aXiomatic, and Vulcan Capital also participated in the round.
Matcherino has raised nearly $8 million since launching in 2015; its previous cash infusion was a $2.7 million round this past December. The company’s software enables esports tournament organizers to run competitions between top gamers. The platform also manages player payouts; facilitates e-commerce and virtual item sales; and more.
Matcherino is powering 500 tournaments a month, said CEO John Maffei, and is seeing momentum with its “SponsorQuest” advertising product that allows brands such as Gamestop, 24 Hour Fitness, Bubba Burger, and others to reach the esports community.
The business of esports continues to rapidly evolve, as Axios noted last week. Investors are still bullish, with investments into related companies already nearing $1 billion this year, according to The Esports Observer. Global esports revenue is expected to top $1 billion in 2019 while worldwide audience will grow 15 percent, Newzoo reported. Big companies such as Microsoft are doubling down. The first Fortnite World Cup just awarded $30 million in prize money.
But some are skeptical of the valuations and expectations of esports businesses. “More and more, esports is looking like a bubble ready to pop,” Kotaku wrote in May.
Maffei isn’t worried.
“Fan growth and interest in esports is on the rise and will continue to grow,” he told GeekWire.
Maffei, who took over as CEO last year, said the biggest challenge for esports tournament organizers is making money off the actual event. That’s where Matcherino comes in, offering advertisers a chance to get involved beyond just brand impressions. The startup takes a percentage of revenue from advertising and ecommerce sales generated through its platform.
“Matcherino offers brands the opportunity to reach esports fans across dozens of titles and hundreds of tournaments each month and establish relationships with esports fans,” Maffei said.
Matcherino has 20 employees. The company graduated from Techstars Seattle in 2015. Maffei took over from previous CEO and co-founder Grant Farwell, who remains chairman.
“Navigating the esports operating landscape has been an inefficient process for brands, players, tournament organizers, and fans alike, leaving billions of unrealized dollars on the table,” Sean Sang Sub Lee, vice president of Early Stage Investing at Wells Fargo Strategic Capital, said in a statement. “We see an opportunity with Matcherino not only to remedy these inefficiencies, but to open these long-untouched revenue streams for years to come.”