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The Berlin-based esports organization G2 Esports announced Tuesday it raised $17.3 million in a Series A funding round, bringing its total outside backing to $24.6 million.
The round was led by three firms: Everblue Management, the family office of hedge fund manager Eric Mindich, who is also part of the G2's board; Parkwood Corporation, the family office of Cleveland's Mandel family; and Seal Rock Partners, the private equity vehicle for Jonathan and Edward Cohen, who serve as executives for oil and gas companies like Atlas Energy.
Joining them are New York City real estate executives Al Tylis and Dan Gilbert; Brian Distelburger, the cofounder of data management tool Yext; Myke Naef, founder of the scheduling app Doodle; and Topgolf Media president YuChiang Cheng.
"Our major goal was to put together an ownership group that would make our efforts even better of making this a billion-dollar company in a reasonable time frame," says G2 Esports cofounder and CEO Carlos Rodriguez.
G2 Esports was founded in 2014 by Rodriguez, a former League of Legends professional player, and Jens Hilgers, founder of esports production company and tournament organizer ESL. Last year, Forbes named G2 Esports the eighth most valuable esports team in the world, worth an estimated $105 million. This month, Rodriguez was featured on Forbes' 30 Under 30 in Europe list for Sports and Games.
With the influx of capital, the team is eyeing global expansion to further take advantage of what's predicted to be a billion-dollar industry by the end of this year. "It's always been our goal to make this a Western organization, focused not only in Europe but also North America and to some degree South America," Rodriguez says.
Before tackling its lofty plans, G2 is first focusing on its home base. Moving from Spain to Germany, the organization has been constructing a facility and hub for its team in the heart of Berlin. "Typically when you hear facility, what you're talking about is a glorified office," Rodriguez says. "We want to be one of the first teams to be doing this the right way."
The company is building its 20,000-square-foot esports hub as a public space for fans, intending to host hundreds for events, a place to game and for youth programs. The team is planning to open in Q3 of 2019.
Much of G2's intended expansion has to do with content creation, another focus for its funding this year. Esports teams rely heavily on attracting sponsorship dollars through fan engagement. "It's not enough to win a world championship in the largest game and then just lay back and enjoy the profits," Rodriguez says.
That means expanding into more games and crafting interesting storylines for fans. The funds will help cover fees for particular leagues, such as the European League of Legends Championship Series. The league moved to a franchise model for the first time this year, requiring teams like G2 to buy-in for $10 million paid across four years. G2 currently sits atop the spring split standings. The company also recently picked up two players for an Apex Legends streaming team. The Fortnite competitor became a smash hit soon after its launch in early February, forcing teams to either react or wait and potentially miss a building wave.
G2 will continue producing documentary-style shows for its teams—its Fortnite talent show Making the Squad, its time on the MTV Spain show Gamers—but also jump into new ventures like comic books or a subscription-based fan app. Rodriguez is hoping his new investors will help him better handle this multifaceted nature of an esports organization—part sports team, part influencer network, part tech company.
"When thinking about esports teams in particular, I genuinely believe we're closer to what Disney is than we are to what the LA Lakers are," Rodriguez says.