Esports investment report, March 2023: FaZe, Vindex, Heroic
Welcome to a roundup of the most important esports investment stories in March 2023.
March was yet another month showing the duality of recent esports trends. On one side of the coin, FURIA opened an office in Malta, StudioNow acquired Bad Moon Talent and Heroic secured vital investment. Meanwhile, on the other FaZe Clan and Enthusiast record losses. Let’s dive in.
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FaZe Clan records $53.2m loss for 2022
North American esports organisation FaZe Clan has announced a net loss of $53.2m (~£43m) for 2022, up from 2021’s $36.9m (~£29.8m) loss.
This figure also doesn’t include a non-cash, one-time accounting charge of $115.3m (~£93.2m) related to FaZe Clan’s public listing in July 2022. When including this amount, which saw the conversion of ‘Legacy FaZe’ debt into common stock, FaZe Clan’s 2022 loss totalled $168.5m (~£136.2m).
The figures were announced on March 30th through FaZe Clan’s Q4 and 2022 fiscal year financial results, owing to the company’s NASDAQ listing. For Q4 alone, FaZe Clan reported a net loss of $19.1m (~£15.4m).
Heroic secures vital $1m investment
Norwegian esports company Heroic Group has secured a funding round of NOK 10m (~£780,000) with primarily existing shareholders, allowing it to continue operations.
The funding round will be used to cover the day-to-day expenses of the organisation and ensure Heroic can continue competing in CS:GO, Rainbow Six and sim racing.
The news comes after a period of uncertainty for the organisation. On January 30th this year, Heroic Group noted to its shareholders that further funding is needed via an extraordinary general meeting. The company announced that it needs at least NOK 80m (~£6.2m) through 2025, with NOK 10m needed before the summer of 2023.
Enthusiast Gaming records CAD $76.8m net loss for 2022
Esports holding company Enthusiast Gaming has recorded a net loss of CAD $76.8m (~£45.9m) for the entirety of 2022.
The figure is part of NASDAQ-listed Enthusiast Gaming’s annual end-of-year financial results, with the amount an increase over 2021’s CAD $52m (~£31m) loss. At the beginning of 2022, Enthusiast Gaming had CAD $22.6m (~£13.5m) in cash available. However, this has dropped to CAD $7.4m (~£4.4m) by the end of the year.
FURIA expands to Europe; opens Malta facility
Brazilian esports and gaming organisation FURIA has expanded into Europe after announcing a new base of operations in the Mediterranean island country Malta.
The new venue, which is expected to be fully functional in the summer, will feature spaces for FURIA teams that compete in Europe. The new headquarters are located in Mellieha, a city located in the far north of Malta.
The facility itself is part of an investment into the Maltese esports ecosystem by FURIA, with the projected investment for the first six months being around €136,000 (~£120,000). The news of the HQ was shared by FURIA Co-Founder and Co-CEO Jaime Pádua via a video during the ESL Pro League event that is also based in Malta.
Astralis 2022 financial results show increased revenue and decreased loss
Danish esports organisation Astralis has revealed its financial results for 2022 in a 52-page annual report which included a letter to shareholders, finance details, an auditor’s report and a future outlook from the company’s Board.
Key highlights of the report included increased revenues — DKK 88m (~£10.3m) in 2022, DKK 75m (~£8.8m) in 2021 — as well as a decrease in overall loss and a positive EBITDA.
The overall cash and cash equivalents for Astralis at the end of the year totalled DKK 9.9m (~£1.1m), down from DKK 23m (~£2.7m) in 2021. For comparison, the company started 2021 with DKK 52m (~£6m) in cash. Percentage-wise, Astralis spent around 55% of the cash available at the start of the year in both 2021 and 2022.
Entain agrees $13.25m acquisition of esports betting company Sportsflare
Global sports betting company Entain has agreed to purchase Sportsflare, Tiidal Gaming’s esports betting solutions firm, for $13.25m (~£10.9m).
The agreement will see Tiidal Gaming sell all of Sportsflare’s shares to Entain. In the release, it was stated that as of right now the deal has only been negotiated at ‘arm’s length’, meaning that there are still several conditions that must be met for the transaction to go through. One condition is that Tiidal Gaming will need shareholder approval. As such, a meeting regarding the transaction is expected to take place on April 26th 2023.
ESL FACEIT Group acquires Vindex
Global esports conglomerate ESL FACEIT Group (EFG) has announced the acquisition of esports technology and infrastructure company Vindex.
As a part of the merger, Vindex will become a part of the ESL FACEIT Group. Vindex CEO Mike Sepso and CSO Sundance DiGiovanni will remain at Vindex while also holding leadership positions at EFG.
The two companies said the merger would grant them better capabilities to grow events such as DreamHack, as well as increase EFG’s studio capabilities in multiple regions.
Giants Gaming launches Giants Innovation Hub, VC fund
Spanish esports organisation Giants Gaming has unveiled the Giants Innovation Hub in Málaga, Spain.
According to a release, its purpose is to ‘support innovative technology projects related to gaming and esports with the purpose of building the internet of the future’. Giants’ owners — Virginia Calvo and José Ramón Díaz — will be heavily involved in the project.
Other stakeholders involved will include Tomás Gasset, founder and CEO of Urbania; Álvaro Villacorta, entrepreneur and investor who has previously led funds in Southern Europe such as Think Bigger Capital; and Álvaro Villacorta, who will lead the project as its managing partner.