One of Britain’s fastest-growing esports franchises has secured millions of pounds in funding from some of the City’s most prominent figures as it seeks to capitalise on the category’s booming popularity since the start of the pandemic.
Sky News has learnt that EXCEL ESPORTS, which competes in the high-profile online battle arena League of Legends and Fortnite, will announce next week that it has raised roughly £17m to fund its expansion.
The fundraising is being led by JRJ Group, which acquired a majority stake in EXCEL in 2018 alongside TOMS Capital, the family office of former hedge fund manager Noam Gottesman.
JRJ was set up in 2008 by the former Lehman Brothers executives Jeremy Isaacs and Roger Nagioff.
EXCEL’s existing investors are being joined by IPGL, the private investment office of Lord Spencer, the ICAP founder and former Conservative Party treasurer.
The family office of Alan Howard, the co-founder of Brevan Howard, one of the world’s most successful hedge funds, is also investing in the company, according to insiders.
The roster of stellar City names underlines growing interest in esports as a sector, which has been fuelled by the public flotations of companies such as Guild Esports, which counts the former footballer David Beckham among its shareholders.
EXCEL was founded in 2014, when the category was still in its infancy, by brothers Joel and Kieran Holmes-Darby.
It now counts Dele Alli, the Tottenham Hotspur and former England footballer, as an ambassador, and has struck commercial partnerships with brands including BT, Sony, Chupa Chups and Beyond NRG, which describes itself as a gaming energy drink.
The company’s profile has soared as a consequence of its status as one of ten founding members of the League of Legends European Championship, and as the subject of a television documentary narrated by the actor Cillian Murphy.
Its new funding round places a pre-money valuation on EXCEL of close to £100m, according to insiders.
TNF Investments, a private equity firm, is also participating in the raise, they added.
People close to London-based EXCEL said it ranked in the top three UK esports teams and that it was forecasting annual earnings growth of 70% between now and 2025.
Its franchise includes the British Fortnite player Jaden “Wolfiez” Ashman, who holds the Guinness World Record for the youngest person in esports history to win $1m at a single event.
The team, which is branded XL, also participates in VALORANT, a tactical shooting game.
Information supplied by the company said its fans had an average age of 32 and household income of £55,000, underlining why the esports sector is attracting such significant commercial interest.
There are now said to be as many as 3,000 professional esports players in the UK.
Wouter Sleijffers, EXCEL’s chief executive, said: “Together with our investors, I’m truly excited to be entering the next chapter, building on EXCEL’s legacy and realising our shared vision for the future of esports and gaming.
“In a very short space of time, EXCEL has cemented itself at the top of British esports attracting significant support from investors, partners, our ambassador Dele Alli, and all on- and offstage talent.
“We now have all the elements in place to aim for more, to go from a household name in UK esports to an internationally recognised, diverse British gaming brand with the ability to derive maximum value from ongoing sector expansion and the growing digitisation of consumer behaviour.”
The wider esports market is now estimated to be worth £1bn, with a global fan base of 500 million people.
The most recent League of Legends final drew 44 million viewers at its peak, while researchers at Newzoo predict that total esports sponsorship will have quadrupled during a four-year period to the end of 2021 to £1.1bn.
Growth across the industry was especially sharp during the early stages of the COVID-19 outbreak, with most traditional live entertainment events suspended, leaving esports and other forms of gaming to fill the vacuum for millions of consumers.
A recent report by The Business Research Company, a market researcher, predicted an increase in merger and acquisition activity in the esports sector, which remains highly fragmented.