The extraordinary rise of daily fantasy sports for video games, aka eSports, continued as the DFS site Vulcun – which is built around eSports contests – announced it has partnered with Sequoia Capital to raise an eight-figure investment.
League of Legendary investments
The Series A round of financing — worth $12 million — is the first investment of this size in an eSports DFS site. (Vulcun had previously raised $1.3 million.) Of course, the niche market in the real-money fantasy landscape has only been around for a few months.
Vulcun launched in January, and has seen sharp growth over the first quarter of the year. The site offers DFS contests based on the games League of Legends and DOTA 2, which are multiplayer online battle arena games, and Counter-Strike, a multiplayer first-person shooter.
Contests at Vulcun resemble traditional DFS sites, as users compete against one another by drafting rosters of eSports players in a salary-cap format. Players score points based on the performance of their picks during eSports competitions.
According to a press release from Vulcun, investors in this fundraising round include (among others):
- Matrix Partners
- Universal Music Group
- Battery Ventures
- CAA Ventures
- Crosscut Ventures
- Naval Ravikant (AngelList)
- Mark Pincus (Zynga)
- Kevin Chou (Kabam)
- Lars Buttler (Trion)
- Joe Kraus (Google Ventures)
- Steven Fan (Yahoo)
“We had no idea that in just 11 weeks we’d be receiving such an investment,” Vulcun co-founder Ali Moiz said.
“I am deeply humbled and grateful to the community for making this possible, and for making Vulcun the the No. 1 place where they choose to play fantasy eSports games.”
Daily fantasy sports has seen a huge amount of growth in the past year, but the pace of growth for DFS for video games has been even faster. Consider the brief timeline in the history of Vulcun:
- Vulcun initially announced in January soon after launch that it would be guaranteeing $250,000 in prizes for for the 2015 eSports season.
- By February, Vulcun upped its guaranteed prizes to a million dollars.
- By March, the site had quadrupled its guarantee from a month earlier, offering at least $4 million in prizes for 2015.
- As of April, users at Vulcun have created 858,000 fantasy teams and picked 6.7 million players for their rosters. Just over $750,000 in prizes have been paid out over the first 11 weeks of the site’s existence.
The amount of money in guaranteed prize pools at Vulcun already surpasses many low- to mid-level DFS sites that focus on traditional athletic sports, and the website is easily in the top 10 in the overall DFS market.
Another real-money DFS site for League of Legends, Alpha Draft, has also seen huge growth in its short history.
Room to grow
The fast growth of the new DFS vertical, which was obviously a huge untapped market, was the impetus for the new round of investment in Vulcun.
According to an estimate provided by Vulcun, more than 120 million people will watch an eSports competition this year, and obviously all of them are viewed as potential DFS players.
Vulcun has successfully found a way to monetize fans of eSports. And, like traditional sports have found, a fantasy component to a real-life sporting contest can help to drive interest in eSports.
“eSports leagues will be the NFLs of the 21st century, with truly global fan bases and games that today’s youth relate to,” said Josh Hannah, partner at Matrix Partners.
“Tournaments for eSports already draw larger live audiences that most traditional sports, and are just in their infancy. Vulcun.com provides the connection between fans and the emerging stars and teams in eSports.”
Equating eSports with the NFL is a bold prediction; obviously the cash cow that is American football has a lot of revenue streams that eSports don’t. At the same time, it’s amazing to think that real-money eSports DFS sites didn’t even exist until this year.
At the rate Vulcun is growing, it’s not hard to believe that eSports will be a major sector of the DFS industry in short order.