eSports Monetization Platform FanAI Raises $1.8M From Pro Sports VC's, Greycroft and Loot Ventures


eSports Monetization Platform Fan.AI Raises $1.8M (Photo: Fan.AI)

eSports Monetization Platform Fan.AI Raises $1.8M (Photo: Fan.AI)

[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]

TNL eSports Startups 013: FanAI Raises $1.8M (Graphic: The Next Level)

TNL eSports Startups 013: FanAI Raises $1.8M (Graphic: The Next Level)

From Forbes July 27, 2017 by Darren Heitner

Esports Audience Monetization Platform Raises $1.8 Million Seed Round

eSports (Photo: Mehdi Fedouach/AFP/Getty Images)

eSports (Photo: Mehdi Fedouach/AFP/Getty Images)

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.

Johannes Waldstein, Co-Founder of FanAI (Photo: FanAI)

Johannes Waldstein, Co-Founder of FanAI (Photo: FanAI)

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. 

TNL eSports Startups 010: Super League Gaming Gets $15M From Media, Sports and Entertainment


TNL eSports Startups 010: Super League Gaming (Graphic: The Next Level)

TNL eSports Startups 010: Super League Gaming (Graphic: The Next Level)

TNL Take: I love Super League Gaming. I love their product. I love their people. I love their model.

I've covered SLG a few times but let me give a TL/DR for the adults that have those walking petri dishes called kids:

It is an organized league where kids can play non-violent games, be part of a community that they love and in a safe place - the movie theater.

TNL eSports Startups 010: Super League Gaming (Graphic: The Next Level)

TNL eSports Startups 010: Super League Gaming (Graphic: The Next Level)

Super League Gaming recently announced a $15M Series C funding round from a superstar team including Nickelodeon, Tampa Bay Lightning owner Jeff VinikaXiomatic, "multiple other pro sports team owners" and DMG Entertainment.

The last one is even more interesting because DMG Entertainment - a global media and entertainment production/distribution company - is launching, wait for it, an eSports division.  DMG is more than likely using their extensive knowledge and experience in China to help bring Super League Gaming to that massive market as well.

Back to Super League Gaming -  Why does the combination of eSports and movie theaters make so much sense? 

  • Real estate ROI
  • Multiple locations
  • Community based experience
  • Monetization

To hear more about Super League Gaming, here's TNL eSports Guest Podcast 002 with their SVP, Andy Babb, earlier this year:

Super League Gaming's League of Legends City Based League (Photo: Super League Gaming)

Super League Gaming's League of Legends City Based League (Photo: Super League Gaming)

There hasn't been much news on how the league is performing - and I've heard directly from theater owners of lack of attendance in certain cities . I'd speculate that this roll out and it's potential in Asia is what drove the investment and high valuation and will be interesting to see if a city-based league of this nature is ready; but I'd like to wait for more real data.

I do want to focus on what they started with and what I could be a huge opportunity: Minecraft.

I believe that Microsoft's $2.5B acquisition of Minecraft will go down as one of the best buys ever - along with Google/YoutubeFacebook/Instagram, Disney/Marvel/Lucasfilm and Amazon/Twitch.

The easiest way to understand the phenomenon that is Minecraft is not to spend $2,000 on a research report - go spend an hour at an elementary school.

There are 383 results on Amazon for "minecraft birthday party supplies". I've been to more kid's Minecraft birthday parties than BBQ's in Brooklyn.

Microsoft worked with to help make a Minecraft version to "train" kids to code using the game - I highly recommend it.

Now combine this with Microsoft's acquisition of streaming platform Beam and you can see it's continued future investment in Minecraft is just beginning.

And how's Minecraft just as a game performing?

Microsoft doesn't break out Minecraft revenues separately but here's how the $7 app has ranked on Paid Apps on iTunes.

Minecraft App Chart Rank (Photo: App Annie)

Minecraft App Chart Rank (Photo: App Annie)

Don't believe me. Get your iPhone right now. Go to the App Store. I 99.9% guarantee you Minecraft is the #1 paid app.

Congrats to the team at Super League Gaming and I'll end with a quote I say in every conversation I have about the company:


Where else are you going to find a babysitter for 3 hours for $20?

Cloud 9 Raises Funding From Athletes and Pro Sports Owners


Cloud9 Owner Jack Etienne On The Right (Photo: Activision)

TNL Take: eSports team Cloud9 funding round from a slew of investors across the Sports and Tech world finally is public.

As I mentioned in December, Cloud9 raised $2.8M based on an SEC filing but the investors weren't disclosed.

I predicted for a while now the San Francisco 49'ers would invest in a team/athlete - but they haven't, instead investing in - Patriots owner Robert Kraft and Elon Musk could be potential investors.

I was pretty damn close.

Here are the Sports and Tech community that invested in Cloud9:

  • San Francisco Giants Athlete Hunter Pence
  • Tesla Board Members
  • LA Dodgers Co-Owner Todd Boehly
  • Former San Francisco 49ers Joe Montana
  • NBA Athlete Andrew Bogut
  • Golden State Warriors Co-Owner Chamath Palihapitiya

A few things.

First, congrats to Jack and the entire Cloud9 team for this funding. I only wish the best for eSports team owners and the hard work they've put in over years.

Here's what has and what has not been reported.

The LA Times wrote the story with the following headline with my Tweet addressing it:

My Tweet About Cloud9 (Photo: Twitter)

Probably a coincidence but the new headline is:

LA Times Changed Headline For Cloud9's Funding (Photo: LA Times)

Based on the vast number of investors and the amount raised - these are more likely small investments across the board.

Why do I say this? Because I have Cloud9's term sheet. I won't reveal the pre-money valuation as it's confidential.

While a consortium of Pro Sports owners and athletes (axiomatic) bought Team Liquid, the Dodgers invested again with their Co-Owner Todd Boehly.

If you still don't believe that traditional sports and eSports will eventually merge, there are way too many investments to not believe at this point.

I still raise the question about why an NFL team hasn't invested directly but I think I know why.

Yesterday, I spoke with NFL athlete Ricky Lumpkin for The Next Level eSports Guest Podcast and he offered his thoughts. Currently being mastered by Metro Boomin and will be out next week.

TNL eSports Guest Podcast 004 With Ricky Lumpkin (Photo: The Next Level)

There are only a few teams left in the US that have strong teams across a slew of games, experience and owners that know how to manage.


Investors, time to get that checkbook out.