ESPORTS MONETIZATION PLATFORM FANAI RAISES $1.8M FROM PRO SPORTS VC'S, GREYCROFT'S NEW FUND AND LOOT VENTURES
[Disclaimer: Loot Ventures is part of the the portfolio of companies associated with The Next Level. Exclusive interview with FanAI Co-Founder Johannes Waldstein below]
Esports Audience Monetization Platform Raises $1.8 Million Seed Round
As of July 2017, there is little doubt in the staying power of esports, which is essentially an industry consisting of competitive video game play that has attracted not only participants, but also a wide range of spectators on platforms such as Twitch. However, one of the biggest challenges remains finding out successful methods to monetize the rapidly expanding industry.
Enter FanAI Inc., an artificial intelligence (AI) driven audience monetization platform that is initially focused on exploiting the esports landscape by collecting fan data owned by the rights holders and data available on various social and streaming platforms, as well as data repository services and payment data, and enriching it to build brand-specific personas and achetypes to predict behavior.
There is clear interest in the startup. FanAI will soon announce that it has closed a Series Seed round, led by Courtside Ventures, for a total of $1.8 million.
"Brands, especially non-endemics, are one of the largest potential revenue drivers for esports, but they have played a very minor role to this point," says Deepen Parikh of Courtside Ventures. "We believe FanAI can spark that shift and drive significant money into the industry. We have a great syndicate of investors coming in on the round."
The round includes Greycroft GC Tracker Fund, a new augmented reality (AR), virtual reality (VR), and esports fund, BDS Capital, CRCM Ventures, Sterling.VC, Loot Ventures (Manny Anekal, Dan Porter), Expansion VC, QB1 Ventures, Rosecliff Ventures, Catalyst Sports, Jason Robins (founder of DraftKings), Jordan Rambis (former VP Business Development at aXiomatic) and Everblue Management.
These investors are observing studies like one from The Next Level, which states that non-endemic brands are looking to increase their esports investment and that the industry is on pace to double 2016's total. FanAI specifically seeks to drive that type of revenue opportunity from non-endemic brands through exploring and delivering information related to the preferences of the esports audience. Thus far, FanAI has already partnered with Mastercard MA, a non-endemic brand, to provide proprietary information to the company as it seeks to make determinations on smart investments.
TNL Take: Exclusive interview with Johannes Waldstein, Co-Founder of FanAI:
The Next Level: Why did you create FanAI and what was the opportunity you saw in the eSports ecosystem?
JW: Our backgrounds are from Google, Facebook and dunnhumby, three of the most data driven companies in the world. Particularly at dunnhumby, where we provided analytics on over 800M loyalty cards from some of the worlds largest retailers like Home Depot and Best Buy, to brands like P&G, Unilever, and Pepsi. We wanted to take the knowhow we had on understanding purchase behavior, social and demographic segments and monetizing data to eSports.
The Next Level: The number of brands investing in eSports are on pace to double 2016’s total with 60+ Non-Endemic’s in the first half of 2017 alone. What can FanAI offer these brands they’re currently not getting after their campaigns end?
JW: There are two problems that we help solve:
/01 There is still a general perception that eSports is an homogenous audience of under-age male, energy drinking caffeine fiends living in a dark basement (our data shows something very different). But many big brands ask how is this relevant to me?
/02 Because the rights holders can't segment their audience by purchase behavior and channel, even if a brand invests sponsorship dollars or marketing budget, they can't correctly target segments of the audience in different social channels and measure how well their investment worked. It is currently extremely hard to show ROI.
FanAI has integrated proprietary purchase data streams and the leading social media channels and so can offer brands the ability to understand and predict purchase trends of the eSports audience across about 200 spend categories as varied as CPG, Automotive and Travel.
The Next Level: What partnerships can you publicly announce and how are you working together?
JW: We can publicly announce our partnership with DreamHack, one of the largest digital festival and LAN party organizers and we have several further partnerships that will be announced over the coming weeks and months.
The Next Level: We’ve talked about brands and event partners - how can FanAI help eSports teams as well?
JW: We have a partnership with Immortals, one of the leading eSports teams in LA and owners of the LA Overwatch franchise.
As eSports teams continue to grow their audiences and sponsorship deals they can use the same tools FanAI has built for the games publishers, agencies and brands to understand and monetize their audience. We have also mapped the social ecosystem for the top 100 teams giving teams the ability to see fan overlap and movement in social networks between leagues, teams, players and sponsors. Understanding how many uniques each has and how many fans they have in common.
The Next Level: The current focus is within eSports and Gaming. Do you see FanAI expanding further into other areas in the future?
We are 100% eSports focused. We currently have seen lots of interest from other areas - from English Soccer teams to pro sports leagues in the US and we certainly have the platform capabilities to expand to other markets in the future.