Southeast Asian esports startup Resurgence has bagged the first tranche of its seed funding round from Singapore-headquartered gaming-focused early-stage investor Gamerforce Ventures. The startup is targeting to close the seed round at about $1 million with Gamerforce by July, a top company executive said.
Resurgence manages 14 teams across multiple games including Mobile Legend, Dota, Starcraft II and Fortnite. It bagged its first championship title at the recent Mobile Legends Bang Bang MPL MY/SG Season 5.
In another potential transaction in the same sector, Southeast Asian esports coaching platform JOSUDO is targeting to raise a $750,000-$1 million round soon. JOSUDO is backed by Battery Road Digital Holdings and Antler.
These developments come as the COVID-19 outbreak has confined people to homes, driving increased content consumption, one of which is gaming, industry observers said.
JOSUDO currently runs online leagues for PVP Esports, a subsidiary of Singapore-based telco Singtel, and Asus ROG Indonesia. Founder Jesus Garbayo told DealStreetAsia: “We are seeing increased interest from players in all regions and also from brands looking to partner and organise their own online leagues with us.”
Resurgence regional manager Bobby Sim said: “[The fundraising] has proven that Singapore has a great talent pool and we will strive further to develop players and talent alike to improve the esports scene in SEA.”
Esports grabbing investor interest
The firm is looking to write cheques in the range of S$100,000-250,000 ($70,776-176,940) in the first round, and up to S$1 million ($707,761) in subsequent rounds.
So far, Gamerforce Ventures said it has closed one investment in an unnamed Singapore-based e-sports company. The fund is deploying into global investments and is scouting for startups in China, Taiwan, Japan, South Korea.
Lance Quek of Gamerforce is bullish about the opportunities in the industry. “Investor interest in esports has definitely increased, and I believe that it will continue to increase over the next few years as the industry matures. Given that global revenues have grown 45% YoY from 2015 to 2019, we estimate that such growth, especially given the SEA scene, will be at a faster pace with the upcoming technologies,” Quek said.
In an indication of investor interest, there was a string of deals last year, the largest of which was Singapore-based Evos Esports raising a total of $4.4 million in its Series A round at the end of last year. Sky Mavis, a blockchain-based video game development studio, raised $2 million from 500 startups, Animoca Brands, and others in November, while Singapore’s Team Flash raised $1.5 million in a seed round led by family office Octava.
According to Southeast Asia and Chinese Taipei Mobile Games Report & Five Year Forecast by ResearchAndMarkets, Southeast Asia is home to more than 500 million smartphone users, and that number is expected to reach 628 million by 2023.
Singapore, in particular, is positioning itself as an e-sports hub. These include hosting gaming trade shows such as Gamescom and competitions such as the Singapore Major, with a prize pool of S$1.36 million ($940,000), in 2020, according to media reports.
Platform models most attractive
But while the appetite for online gaming is growing, the infrastructure of SEA’s gaming ecosystem is still in its infancy, industry watchers said. And even though consumption trends are rising, the challenge is in monetisation of this opportunity. Investors are also turning cautious, given the bleak global economic outlook.
Still, the industry is likely to gain traction in Southeast Asia, driven by investor interest from Northeast Asia, said South Korean venture capitalist Charles Rim, of Access Ventures.
“We believe Esports is a sector that has more resilience than others, which is true for all entertainment. Of course, there is an impact from not being able to hold events, but the fandom is hungry for digital entertainment,” Rim said.
He added: “Not all [e-sports] models are the same, and we continue to view platform models as the most attractive. In fact, we are closing on a very exciting deal in Indonesia.”