Saudi Arabian esports and gaming company Savvy Games Group has announced an investment of $265m (~£219m) into Chinese tournament operator and esports company VSPO, which would make the company its single largest equity holder.
Savvy and VSPO said the deal symbolises a ‘landmark commercial partnership’ between China and the Kingdom of Saudi Arabia within the esports industry. Exact details regarding the equity percentage have not been revealed.
Despite being announced, the transaction is expected to close in the coming months. This is because it is subject to the receipt of required regulatory clearances and approvals, as well as the ‘satisfaction of other closing conditions’.
VSPO, which recently rebranded from VSPN, is a major stakeholder within the Asian esports industry, with the firm operating various tournaments and leagues in China. In particular, the company is the operator of the King Pro League, Honor of King’s franchised league. Its long-term partnerships with developers include deals with Tencent, Garena and Krafton.
The investment will support VSPO as it delivers its global esports strategy and accelerates growth. Moreover, the funding looks to further position Savvy Games Group as a key stakeholder within esports, aligning with Saudi Arabia’s Vision 2030 project.
Savvy Games Group isn’t the only notable equity holder within VSPO. In 2020, Tencent led an approximately $100m (~ £76.23m) Series B funding round. This was followed by two multi-million dollar funding rounds in 2021 in January and June.
Savvy Games Group is an investment group launched and fully owned by the Saudi Arabian government’s Public Investment Fund (PIF), a sovereign wealth fund. In January 2022, Savvy Games Group bought ESL Gaming and FACEIT for $1.5bn (~£1.1bn).
Savvy Games Group’s latest major investment comes after it unveiled a SAR 142bn (~£34.5bn; $37.9bn) investment strategy in 2022. The company highlighted that it planned to acquire leading game publishers as well as invest in ‘key companies’ within the esports scene.
Saudi Arabia’s government-led esports activity and acquisitions have attracted criticism amongst the esports community due to the country’s human rights record.
Danny Tang, CFO and Co-Founder of VSPO, commented on the investment: “This investment represents a substantial step in building the global esports sector and symbolises the incredible opportunity for growth within a relatively young industry. Esports are played and enjoyed around the world, so to have the support of Savvy, whose ambitions mirror our own, is hugely encouraging in our joint vision to promote esports as not just a sport, but a worldwide community.
“Although we have seen significant growth of mobile esports over the last decade, especially in China, the industry is still very much in its infancy. As the virtual and physical worlds collide further and further, the popularity of esports will only grow and we are excited to work alongside Savvy to drive the long-term growth and development of the esports industry globally.”