Eager to get a slice of the next thing in fantasy sports, over a dozen investors have taken a stake in Venice’s AlphaDraft, an online fantasy contest for video game competitions.
AlphaDraft today announced it raised a $5 million investment round led by Metamorphic Ventures with participation from several others including William Morris Endeavor Entertainment and former NBA Commissioner David Stern.
Residing within accelerator Amplify LA’s offices, AlphaDraft runs fantasy competitions online, much like fantasy football competitions, in which contestants bet on the statistical performance of players in video game tournaments. Competitions are free or have paid entry fees: AlphaDraft takes a percentage of the fees.
Though fantasy e-sports may seem like niche entertainment, video game competitions have become big business recently. The 2014 championship tournament for League of Legends, for instance, a video game made by L.A.’s Riot Games, sold out the Staples Center and boasted 32 million online viewers.
That kind of excitement around e-sports viewership led Seattle’s Amazon to buy Twitch, an online video game streaming service, for $970 million last August; encouraged ESPN 2 to start televising video game tournaments in April; and caused talent agency William Morris of Beverly Hills to purchase e-sports talent agency Global eSports Management for an undisclosed amount in January.
“WME sees e-sports as a huge part of the industry going forward,” said AlphaDraft Chief Executive Todd Peterson. “The size of this market will likely surpass the size of all traditional sports markets.”
If all of this seems too farfetched, consider this: AlphaDraft said it has over 1 million contest entries since launching in January and its top winner, an actuary who designed his own statistic model for creating fantasy video game teams, has won $30,488 in prizes.
Through a combination of giving away $5 million in prizes and hiring additional marketing staff AlphaDraft, which decline to disclose current user numbers, believes it can get to 1 million monthly active users in the next six months.
Participating in the funding round for AlphDraft, besides WME and Stern, were Upfront Ventures, IDG Ventures, Amplify LA, Freestyle Capital, KEC Ventures, Gokul Rajaram, SK Ventures, Greycroft Partners, Melo7 Tech Partners and Basset Investment Group.