The company that owns the esports team Team Liquid, Axiomatic Gaming, has raised $35 million in funding. This is the latest example of big investments coming into the industry.
Ares Management, an investment group, led the funding round, which put Team Liquid’s value at $415 million. Ares Management also has small stakes in traditional sports teams such as Atlético de Madrid and McLaren Racing, as well as a senior secured credit line with the San Diego Padres. In June last year, the company said that it would invest more than $1 billion in sports, media, and entertainment.
This is Ares’s first investment in esports. In the past seven months, there have been other deals in the same area, such as a $60 million round for 100 Thieves, a $35 million round for Misfits Gaming Group, and a $12 million round for Ampverse. Last month, a company called Infinite Reality paid $470 million in stock to buy ReKTGlobal, which owned the esports teams Rogue and the London Royal Ravens.
“We spent a lot of time looking into the esports industry because we weren’t sure if we were going to invest or not,” says Kort Schnabel, partner, and co-head of U.S. direct lending at Ares. He was drawn in by more than just Team Liquid’s history of winning competitions since it started as a Starcraft clan in 2000. “When we found the Axiomatic opportunity, it had things that none of the other esports opportunities we looked at had.”
Gaming team liquid 35m ares management:
Revolution Growth, a Washington, D.C.-based venture capital fund well-known in the media and entertainment industries, and Hiro Capital, which focuses on gaming and esports investments, are also part of the round.
Hungate says the group will use its new money to look into possible acquisitions that could take the team into new markets and grow its fan base around the world. The team’s fastest-growing market is Brazil, where it already pays for the Valiant and Rainbow Six teams and is about to start building a new training center, its third after opening spaces in Los Angeles and the Netherlands.
Mark Vela, the CEO of Axiomatic, says that the company now has nine different ways to make money. In 2021, the company’s top-line revenue went up by 50%, and he thinks that it will “accelerate even more” this year. The changes are part of a shift in the industry as a whole. Organizations are trying to move away from just competitive play and the sponsorships that come with it in order to make their businesses more diverse.
Peter Guber, who owns parts of the Golden State Warriors, Los Angeles Dodgers, and LAFC, and Ted Leonsis, who owns the Washington Wizards, Capitals, and Mystics through Monumental Sports & Entertainment, started Axiomatically. Michael Jordan, Magic Johnson, and motivational speaker Tony Robbins are also investors in Axiomatic. In 2016, it bought a majority stake in Team Liquid.
The group wants to create the kind of loyalty that big sports teams like the English soccer team Manchester United have, even though they don’t have deep, multi-generational roots in any one place. Gamers also tend to be fans of a single game or player instead of a single organization across all esports. Still, Axiomatic thinks that Team Liquid can make a lot of money from its teams and fans without having to reinvent itself through the metaverse or non-gaming products, as other esports organizations have done.
Hungate says, “We are a competitive esports team. We are not a lifestyle brand.” “Other esports teams try to stand out by being exclusive clubs that only really cool people can join. We’re much more about being open to everyone.
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