In April 2017, BITKRAFT announced the ‘first global venture fund for esports’. It promised sizable investment in start-ups related to esports, to the tune of €100,000 to €400,000 (£84,000 to £337,000) for individual companies. The firm has offices in the Western esports hubs of Berlin and Los Angeles.
BITKRAFT recently announced its first investment in Tier One Entertainment. This is an agency focused on developing talent in South East Asia. Eager to know more about BITKRAFT’s plans beyond this we had a chat with one of the three founding partners; Jens Hilgers.
Esports Insider: Which type of investments are BITKRAFT looking to make in the space? We presume it’ll be strictly businesses and not teams…
Jens: Well, I do think that teams are businesses as much as any other company in esports, but to the point: we do not invest in esports teams to avoid any conflicts of interest.
Instead, we focus on products and services that benefit teams and on startups that increase enjoyment for both players and fans of esports.
Esports Insider: Do you recognise an issue with investments in multiple teams and senior involvement with league and tournament organisers?
Jens: At BITKRAFT we strive for transparency. I stepped down as Chairman of the Board at ESL in 2015. As part of the acquisition agreement with MTG, it was agreed that I would temporarily remain on the board as an observing (non-voting) member, in an effort to aid the transition and support with experience and advice. I stepped down from the ESL Board entirely in December 2016.
“We focus on products and services that benefit teams and on startups that increase enjoyment for both players and fans of esports”
Privately I am a co-owner of G2 Esports.
BITKRAFT does not invest in any esports teams, nor is BITKRAFT invested in or somehow affiliated with league and tournament organisers.
Esports Insider: Who will be on the ‘Dragons’ Panel’ making the ultimate decisions about which start-ups to invest in and support? What kind of help will BITKRAFT provide beyond just financial, can you tell us more about the ‘incubator’ part of the plan?
Jens: All potential investments are discussed in our deal flow meetings, which our entire team participates in. Final decisions are made at partner level which includes three partners at the moment: Markus (Markus Fuhrmann), Minard (Minard Hamilton) and myself.
“All BITKRAFT Partners have launched, invested, pivoted, scaled, and successfully exited esports startups”
We happen to have cash to invest, but we’d like to think that being active partners to our portfolio companies provides much bigger value than just funds. You can see that reflected in the team composition at BITKRAFT. All BITKRAFT Partners have launched, invested, pivoted, scaled, and successfully exited esports startups. Our experience and network provide significant advantage for our portfolio companies, not just in Europe or North America but Asia as well.
Esports Insider: Where do you see the greatest potential for innovation in esports right now?
Jens: I personally believe that the greatest opportunity is in creating the next entirely new big esports game, rather than creating a copy of an existing game with a slight variation in mechanics.
CSGO, Dota and Hearthstone are great examples of genre defining new esports games. It is about time for the next title and genre.
Esports Insider: Thoughts on the potential and growth of mobile esports…what does it take for a title to be legitimately recognised as an esports title?
Jens: I truly believe a title needs to play to its platform well. For example I have a bit of a hard time seeing mobile/touch shooters ever really breaking out as a top spectator esport, as the level of control you can exercise with touch is clearly inferior to PC controls (keyboard and mouse).
As a result, the level of gameplay players can create on PC will create a much deeper, more intense, and appealing spectator experience. That is especially true to very fast paced and motion controlling games such as shooters. It is not easy to find a genre on mobile/touch that will be more fun to watch than its PC equivalent. This applies equally for PC vs. Console (joypad).
“I personally believe that the greatest opportunity is in creating the next entirely new big esports game”
And to avoid being misunderstood: there might be competitive mobile games that are much larger in player-base and more commercially successful, compared to their PC brothers and sisters, but I can’t see them becoming as exciting of a spectator experience and thereby top esports.
There might also be Mobile/Touch only esports genres that truly play best to the Touch interface and just are not as great on PC. I just have not come across them yet.
Esports Insider: Will this fund help cement Berlin and LA as the Western hubs of esports globally? Have you considered opening offices elsewhere?
Jens: Yes. We strongly believe in both cities. As with tech and the Silicon Valley, magic happens in places where critical factors come together for an industry. For esports in the West: that’s Los Angeles first and then Berlin.
“I have a bit of a hard time seeing mobile/touch shooters ever really breaking out as a top spectator esport”
As a fund investing globally, having offices in both locations is key for us.
Esports Insider: To any graduates or ‘young people’ wanting to work in esports what would be your advice in terms of how to find a job or how to get started?
Jens: Don’t talk. Do.