Cloud9 have raised $25 million (£18.9m) in their first round of venture capital financing from a number of high-profile companies in media, sports, and entertainment.
Investors include WWE, the Beverly Hills Sports Council, Raul Fernandez (co-owner of Monumental Sports & Entertainment), Michael Ovitz (co-founder of the Creative Artists Agency), venture capital firm Founders Fund and a joint investment from tech investors David Sacks and Bill Lee, according to a report by ESPN.
MLB veteran Hunter Pence is also claimed to have participated in the Series A financing, and will now have the possibility of sitting in on shareholder meetings as a board observer.
“We thought they were on their way. We looked at a lot of players, and they were the ones we put in the top tier.”
The news follows our report last month that had raised $19.7m of the $25m total, as revealed in a September SEC filing. It appears that Cloud9 was successful in completing the funding over the following weeks, with several backers from a $3 million (£2.27m) seed round as early as January increasing their stake in the company. FunPlus, Rick Thompson of Signia Venture Partners, Reddit co-founder Alexis Ohanian, and Bill Lee are all reported to have raised their investments in the organisation.
WWE’s decision to invest in Cloud9 was a result of an assessment that the organisation and players were the most likely to achieve long-term success, said Chief Strategy and Financial Officer George Barrios.
“We just thought that Cloud9 team had developed lots of expertise and we’re just really, really impressed with Jack [Etienne, Cloud9’s CEO] and the rest of the staff; how professional they were, how organized and how much infrastructure they had built for a small organization,” George said. “We thought they were on their way. We looked at a lot of players, and they were the ones we put in the top tier.”
Cloud9’s funds come at a crucial time, with an expected $30m to go out in franchise fees after successful applications to spots in the North American LCS and the London base in Blizzard’s Overwatch League were reportedly granted. Uncertainty over those fees was the only reason that January investment was so limited, according to Jack Etienne.
“We didn’t really bring too much money into the company in because we didn’t know what the franchise and entry fees were going to be,” he said. “We didn’t know for sure which games we’d be a part of. It was a bit premature to have the sizable round that we ended up doing this time. It was always in the plan, even when we did our seed, we knew this was coming and the timing was going to be around when we knew what the franchising costs would be depending on what we were looking at. That’s what brought this on.”
Jack’s conversation with ESPN also revealed plans to build a Cloud 9 player facility in Los Angeles, although with few details to spare that appears to still be in the pipeline for now.
Esports Insider says: Cloud9’s investment is great news for the organisation, which continues to go from strength to strength under the guidance of Jack Etienne.