AlphaDraft, Vulcun Appear Headed Toward Duopoly in Fantasy eSports
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Fantasy eSports Site AlphaDraft Raises $5mm In Latest Surge For DFS For Video Games

The nascent industry of daily fantasy eSports got another boost on Tuesday, as the fantasy platform AlphaDraft announced it had received a $5mm round of funding.

$17 million for fantasy eSports in a month

The round of funding for AlphaDraft comes after Vulcun, another eSports DFS site, raised $12mm via Sequoia Capital just last month. (That was Vulcun’s second round of funding, after an earlier $1.3mm round.) And that doesn’t count the $3mm raised by an eSports betting website called UNIKRN.

Much like traditional daily fantasy sports, users at AlphaDraft pay real money to enter contests. They then pick teams of fantasy players that are competing in eSports competitions, in games like League of Legends. After that, they can watch the competitions and track their fantasy team, and win real-money prizes.

The funding round was led by Metamorphic Venturesformer NBA Commissioner David Stern is also among the investors. Other investors include:

  • WME
  • Upfront Ventures
  • IDG Ventures
  • Amplify.LA
  • KEC Ventures
  • Freestyle Capital
  • Gokul Rajaram
  • SK Ventures
  • Basset Investment Group
  • Greycroft Partners,
  • Melo7 Tech Partners

Lots of people are seeing potential and huge growth in the intersection of eSports, live streaming and wagering, as evidenced by the large amounts of money being invested in the space. Hundreds of millions of people play video games, and estimates place viewership of eSports at over 130 million people, with some estimating that number at more than 200 million.

Arms race?

The AlphaDraft/Vulcun dynamic is starting to shape up a lot like the battle for market supremacy between DraftKings and FanDuel in the larger daily fantasy sports industry.

AlphaDraft said it will be paying out “at least $5 million in cash and prizes in its first year,” and forecasts a user base of 1 million by the end of 2015.  A couple of months ago, Vulcun said it would guarantee $4 million in prizes this year.

Of course, that’s small change compared to the hundreds of millions — and likely north of a billion dollars — that both FanDuel and DraftKings are likely to award in 2015. But it’s a meteoric rise for an industry that didn’t even exist six months ago; the two fantasy eSports sites launched nearly simultaneously in January.

There will also be a push to roll out new contests based on other eSports.

Currently, Vulcun offers real money fantasy eSports contests based on the games League of Legends and DOTA 2, which are multiplayer online battle arena games, and Counter-Strike: Global Offensive, a multiplayer first-person shooter.

AlphaDraft offers LoL and DOTA fantasy contests, as well as games for SMITE. The site plans to roll out CS:GO contests soon, as well as contests for a yet-to-be-announced game.

The duopoly and the competition between the sites will likely be good for the end users. And it will be interesting to see if one site gets an early leg up in establishing market dominance.

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Dustin Gouker
- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.