Daniel Mitre explains New Wave Esports’ unique stance on investment

12 September 2019


New Wave Esports is an esports investment company that’s aiming to do things a little differently. Identifying four important pillars of investment, it aims to create a diverse portfolio of companies that inhabit different corners of the industry.

Ahead of his keynote at ESI London, we chatted with Daniel Mitre, CEO of New Wave Esports to find out about these pillars, the companies it currently invests in, and his thoughts on the current esports investment trends.

Daniel Mitre New Wave Esports
Photo credit: New Wave Esports

Esports Insider: What role does New Waves Esports play in the esports industry?

DM: Our sole purpose is to invest, acquire and develop technologies around esports to push competitive gaming industry forward. We love it and we know that our communities love it. We’re doing this by investing into four different pillars within esports. The first pillar is teams and organisations, we invested into Lazarus – we placed a sizable chunk into them. They took home $3.5 million in the Fortnite World Cup so we’re really proud of that investment.

The second pillar that we invest in is platforms, whether that’s an online tournament portal, betting and gambling, portals for coaching and insight, and so on. Oone of the companies that we placed investment in early on was PlayLine, which was co-founded by UFC Middleweight champion Michael Bisping. PlayLine deals in daily fantasy sports and is bringing over an esports component so you’ll be able to bet on esports.

The third pillar that we invest in is events. We have a significant equity stake in a company called Even Matchup Gaming, which produces some of the biggest tournaments in Canada. It has two major events a year: a national Super Smash Bros. tournament called Get On My Level and a Super Smash Bros. Ultimate event called Let’s Make Moves. It also hosts 79 other events throughout the year and contributes towards esports at grassroots and collegiate levels.

Technology is the fourth pillar for New Wave Esports. We have some good platforms coming out next year that are listening to the needs of esports and developing solutions for them. We have such a diversified portfolio because we believe in economic durability, especially since we’re going public on the Canadian Securities Exchange in October.

“We want to work with companies that believe in what we believe in.”

ESI: Why did you choose to invest in Lazarus in particular when there are so many organisations out there?

DM: Our company was initially set up in Canada and we wanted to quickly exercise some of our working capital into some Canadian companies. We saw that Lazarus’ parent company, Tiidal Gaming, is very proficient; they’re optimized and working as a very green business.

The organisation has a roster of 50 athletes across 10 different countries and 12 titles. This includes female teams for Counter-Strike: Global Offensive and League of Legends, they’re pushing for diversity and that’s very much needed in esports. 

ESI: How do you identify what’s a solid, promising investment for your company?

DM: We look at certain criteria: what’s their path, when are they going to start to dial in the revenue, their tactics, what their team is like, their network, their understanding of the industry, and so on.

You look at some of the traditional elements within a business, as well as exactly how are they contributing to esports and if we see them sticking around for a few years.

What I think is most important here is ethics. Are there as passionate about esports as we are and do we share the same vision? There’s a lot of companies out there and we could just be writing cheques left and right, but we want to work with companies that believe in what we believe in.

New Wave Esports Portfolio
Image credit: New Wave Esports

ESI: We’re currently seeing a pattern of celebrities, and rappers in particular, coming in and investing in esports. Is this a healthy trend?

DM: It’s really interesting. From an investment standpoint, it makes sense. We see that a lot of traditional investors made a ton of money in cannabis but all those multipliers are long gone. They can still make money but it’s just going to take longer. All the analysts and investment firms are saying the next big thing is esports. So from an investment standpoint, you know, if I’m Drake or Will Smith, I’m going to jump on the next big opportunity.

Where they add additional value as a strategic investor is their name. When Drake put millions of dollars into 100 Thieves it made major headlines, this put the organisation more on the map and that brings a lot of great working capital over where Matthew “Nadeshot” Haag can start doing some awesome things. And same with all these other big time teams that are raising great capital.

“I think a lot of these teams are over-evaluated.”

ESI: There’s a lot of discussion around whether esports is currently in a bubble or not, where do you stand on this?

DM: I wouldn’t say we’re in a bubble, but that there’s a market correction on the horizon. Gaming has been around since the late sixties, early seventies and we know it’s not going anywhere. Since its inception, we’ve always seen that people are interested in seeing other people play video games. So no matter what happens with esports, we will always be entertained by someone playing a video game better than us.

Saying that, I think a lot of these teams are over-evaluated. Some companies are saying “Hey, I’m worth $150 million,” though they may often not be. It may just be storyline where they’re trying to raise capital.

There will be a market correction. Those that are using their capital and building something sustainable will stick around. Those who are pumping major burn rates without a profitability inflection point over the next two or three years may not survive. We, as an industry, need to correct some issues with using our money correctly and building more of an ecosystem for everybody to be successful rather than just trying to monopolize.

ESI: Why did you decide to get involved with ESI London?

DM: I’ve always heralded Esports Insider as one of the go-to outlets for esports news and communities. I’m honoured to be able to stand on-stage at ESI London. I think what you guys have built over the years is incredible and with your help, we’re bringing great eyes to esports. We’re pushing those major headlines, showing mass audiences that esports is really here to stay in. There’s some serious movement going on.

I’m excited to be on stage to show my presence and I’m looking forward to meeting a lot of people that are coming out that you’re attracting.