Mainline, a Houston-based esports tournament software and management company, announced today it has raised a $6.8 million Series A funding round led by Work America Capital. (Unnamed individual investors in professional sports and other strategic backers also participated in the round, according to the company.)

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Mainline has developed a white-label tournament platform that specializes in hosting and helping brands “manage, monetize and market their esports programs.”

Indeed, monetization has been a known challenge for the fledgling esports industry, as Alex Wilhelm and I outlined for Crunchbase News here.

Mainline was born as a subsidiary of Houston-based FanReact (now Truss) that got spun out in 2016. Its initial focus was to serve the collegiate esports market. But it has since expanded, and its platform is being used in amateur, collegiate and professional competitions.

For example, Mainline says it was a key contributor and managed all tournament operations for ESPN’s inaugural Collegiate Esports Championship in May of this year.

“We’re starting to partner with some of the biggest global brands who want to run their own tournaments on their own platform,” he said. “Besides licensing our software, we help organize tournaments, handle live events and produce things when needed.”

The company is also working with hospitals to offer internal tournaments for their patients.

Esports

Mainline CEO Chris Buckner believes esports and gaming in general are “exploding” sectors but that “continuity in tournament organization is lacking, keeping the sport from really taking off in other viable and exciting markets.”

Mark Toon, co-founder and managing partner of Work America Capital, a Houston-based early-stage venture firm, said that part of the issue with monetizing esports is that the industry took off “like a rocket,” while the technology infrastructure wasn’t there at the beginning to support it.

Mainline, he said, is able to help better standardize and organize the industry so that more players can participate and more teams can be created -– leading to “more money and bigger, better tournaments.”

The company says it will use its new capital to “enhance” its esports tournament software technology platform, on marketing and to hire more folks.

Results

Mainline is growing rapidly, according to Buckner. He declined to disclose exact revenue but noted that so far in 2019, it’s up 11 times compared to 2018 and is in the seven-figure range. The increase, he said, has been driven primarily from the licensing of its platform and the events and production side of its business.

Mainline, he added, went from having one collegiate partner to seven in the last six to seven months. It plans to have 20 signed by year’s end “at minimum.”

Opportunity

We’ve written more than once about startup PlayVS’ efforts to build an esports infrastructure for high schools. But it’s also growing rapidly at the collegiate level. Tespa, a collegiate esports tournament organizer, counts 850 schools among its members in programs with nearly 20,000 players.

The National Association of Collegiate Esports (NACE) currently counts more than 170 registered schools as members. Globally, esports is growing as total industry revenue for 2019 is on track to hit $1.1 billion worldwide, according to Newzoo. As well, viewership for esports has increased from 335 million to 454 million total audience since 2017.

“Seventy percent of college students play games on a weekly basis,” Buckner told Crunchbase News. “We go to schools directly and give them the opportunity to white-label our platform. It’s becoming a recruiting tool at this point.”

Mainline has lofty goals. Buckner wants to see “every single school in the collegiate space” using its platform.

Despite its challenges, the esports space has seen some notable fundings as of late. Earlier this month, Nerd Street Gamers, a fast-growing national network of esports facilities and events, raised a $12 million Series A led by an unlikely investor, retailer Five Below. The aforementioned PlayVS in September scored “a $50 million Series C in its third funding round over a 13-month period.” And in July, 100 Thieves, a popular esports team, announced that it closed a $35 million Series B.

Illustration: Li-Anne Dias