PlayVS, a startup building the infrastructure and an official platform for high school esports, has raised a $50 million Series C in its third funding round over a 13-month period.
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The financing, which closed in July but is just now being disclosed, comes less than 10 months after the Los Angeles company’s $30.5 million Series B (which we covered at the time) and 13 months after its $15.5M Series A funding, bringing its total raised to $96 million. PlayVS was founded in early 2018.
New Enterprise Associates led the latest round, which included participation from Battery Ventures, Dick Costolo and Adam Bain of 01 Advisors, Michael Zeisser, Sapphire Sport, Dennis Phelps, general partner at IVP and Michael Ovitz, co-founder of CAA.
PlayVS’ first product is dubbed ‘Seasons,’ and so far brings League of Legends, Rocket League and SMITE to high schools across the country. The company is working on more partnerships that it declined to name at this time.
In a phone conversation, PlayVS founder and CEO Delane Parnell (who we profiled in this piece last year) did tell me that a lot has happened since the Series B. For one, the startup has now “successfully operated” two seasons and according to Parnell, “validated the appetite for the product.”
PlayVS (pronounced Play-versus) currently has 13,000 schools on its waitlist which, according to Parnell, represents 68 percent of all high schools in the United States.
“Many are going through onboarding and getting activated for the Fall 2019 season,” he said.
PlayVS has also shown it can grow and scale its state partnerships, he said, growing from five in the fall of 2018 to eight in the spring of 2019 and now up to 15 (including Connecticut, Georgia, parts of Texas, and California). This means that students in those states can compete in state championships. (States not endorsed by their state association will compete regionally for a PlayVS Championship.) Also, its platform will be available to high schools across all 50 states (including D.C.) this fall.
“In our first two seasons of operation, we saw no product failures and learned a ton,” Parnell said, “in particular around game integration.”
The company plans to use its new capital “efficiently,” he said.
“Throughout the summer, we rebuilt the product, matured the company and built out the executive team,” Parnell said, including people from Headspace, Spotify and other startups. It has increased its headcount from 16 employees at the end of last year to a current total of 41.
Ultimately, the company is eyeing ancillary markets and wants to become a platform for amateur players in general.
“Our goal is for PlayVS to become a generational product like Twitch, so we want to leverage the resources we have to hire really smart people to build incredible products,” Parnell told me.
Within high schools, its goal is for as many students as possible to be able to participate. Currently, PlayVS charges $64 per player to participate per season, a sum that Parnell said is far below that of other sports. But for now, as it is a nascent program, schools need to recruit more coaches so that more players can participate, according to Parnell.
Beyond the participation fee, Parnell sees potential revenue streams in building additional products and services to bundle onto its platform.
“There’s a ton of opportunity to leverage software we’ve built and are building,” he told Crunchbase News. “We want to take that to amateur esports, growing our presence internationally and alongside publishers. Our vision for the company has evolved.”
Early Investor Weighs In
Investors seem excited about that vision.
NEA Partner Rick Yang notes his firm has backed PlayVS since its founding and his enthusiasm has only increased with time.
“While there are established forums for casual gameplay and professional gameplay, there is a big gap in the market when it comes to amateur esports,” he wrote via email. “The high school demographic is the perfect place to start to close this gap, and PlayVS has made tremendous strides in launching this new market.”
In particular, NEA has been impressed by the team PlayVS is building out as well as with the “pace of growth and expansion…early on across schools, states, and games across multiple publishers.”
And the icing on the cake? People seem to really like the product. According to Yang, feedback from athletes, coaches and parents “has been extremely positive.” Both students who have played other sanctioned sports and newcomers to sanctioned activities have participated so far, he said.
“PlayVS is changing lives and experiences of student athletes in all sorts of positive ways – building community, self confidence, friendships, life lessons, and boosting academic performance,” he wrote. “I think we are just at the beginning of the creation of a very large category.”
Other Players In The Game
Meanwhile, PlayVS is not the only esports-related company raising money this week. Today, XY Gaming announced a $2.5 million seed raise. KB Partners and Varga Capital led the round for the San Francisco-based global esports tournament platform.
“The majority of the esports market has few opportunities to compete for cash prizes,” said XY Gaming co-founder and CEO Aaron Fletcher, in a press release. “Through our simple, free, and one-click to enter and play platform, we enable gamers of all skill levels to take their gaming to the next level in a fair and secure environment.”
In general, esports has had its ups and downs. While funding in the sector is certainly up as it continues to go mainstream, there have been concerns about monetization. It will be interesting to see how the space plays out in terms of winners and losers.
Blog Roll Illustration: Li-Anne Dias
Photo Credit: Sean Yalda