How does an esports company get its footing? A simple question with an infinite amount of possibilities. Venture capital firm, Stadia Ventures is hoping to answer that for startups entering the esports space.
Based in St. Louis, Missouri, Stadia currently holds accelerators (incubators) for startups focused on traditional sports. During these accelerators the firm not only assists with financial investment but provides mentorship and business education to the emerging companies. While the accelerators are currently focused on traditional sports, the magnitude of interest in esports made it clear to the firm that replicating the same model for an esports accelerator was necessary.
Tim Hayden, Co-Founder of Stadia Ventures talked to Esports Insider and said expanding to esports is a no-brainer:
“In our sixth [traditional sports] cohort with 300+ applicants about 10% – 15% were actually esports.
“The revenue numbers came out recently for 2017 and the entire sports industry plus sporting goods combined was about $149bn (£112bn) while the entire esports and video game industry was $147bn (£110bn). It’s literally happening under everyone’s noses without people knowing it. Two years ago we hosted a panel on the power of esports with 300 guests and it boggled their minds the power of esports and what’s going on in the video gaming community so it’s easy for us to just leverage that next piece. In a way, each of the companies we deal with all have the same business issues and that’s kind of what we’re seeing for esports as well.”
As Stadia began to explore the idea of holding a dedicated esports accelerator the firm didn’t look to the west coast, the essential esports capital of the United States, but instead to Frisco, Texas.
In partnership with LaunchPad City, the firm held a traditional sports cohort in the summer of 2017 and witnessed the esports potential growing in Frisco. Five years ago you may have heard of Frisco, Texas and thought nothing of it, especially in relation to esports and gaming. Now, as a city just 30 minutes from Dallas-Fort Worth, Frisco is one of the largest growing cities in the United States thanks, in part, to gaming. Gearbox Software, Infinite Esports and Entertainment, and compLexity Gaming all call the city home and with a team in every major traditional sports league, Frisco and Dallas-Forth Worth is a prime area for new technology and innovation solutions for startups in sports and esports.
Kedreon Cole, Director of Esports at LaunchPad City said: “People who consider themselves ecosystem builders believe that Frisco and the Dallas-Fort Worth metro area will become a major esports hub that continues to attract top business talent and large capital investments in the space over the next few years.”
The Stadia/LaunchPad accelerator will receive around 300+ applicants for the fall cohort and of those only 10 will be invited to Frisco for a “Shark Tank style” panel with veteran esports professionals and experts. From then, about five will be chosen to participate. The accelerator itself will last 14 weeks and aside from investing $100,000 (£75,300) into each company Stadia will provide business development advice, assist with market strategies, financial modeling and assistance from mentors to learn how to take their product to the next level.
When the 14 weeks are completed, each startup “graduates”, but companies aren’t simply sent out into the world on their own. Stadia continues to support them with resources and mentorship after the accelerator ends.
Hayden told Esports Insider no company really leaves the Stadia Ventures family: “I’m Italian so what we tell all of our accelerator companies ‘once you’re in the family, you don’t really leave [laughs].
“Our goal is to get them to an area where they can move on to the next phase of their life. We have an entire alumni program that’s setup with a full staff and our network is always open to them even after graduation. We do road shows around the country where all the companies in our portfolio can interact. We’ve been around for about two and a half years and we’ve already had two successful exits which usually take around four to five years.”
Esports investments are announced ever so often now, and there are still companies with potentially groundbreaking ideas looking to break into the space but without the capital or means to do so. As Stadia Ventures and LaunchPad City use the same model from their traditional sports accelerators in the past, the forthcoming esports cohort will be a welcome opportunity for these unknown companies. Who knows, the next big esports company might just emerge out of this very program.