Investing in Fnatic: an Esports Technology Leader

Investing in Fnatic: an Esports Technology Leader
Article by
January 5, 2023

As the world becomes increasingly digital, dominant brands from Netflix to Microsoft are dedicating increasing resources to building robust gaming offerings to tap into burgeoning market demographics. Within gaming broadly, esports teams remain dedicated leaders in navigating the often-complex consumer-facing branding and product offerings that cater to such elusive upcoming demographics and present many synergistic opportunities across the broader blockchain ecosystem.

Sitting at around $200bn in market cap, gaming is one rapidly growing technology-adjacent sector poised to benefit from several concurrent developments across the broader market space. Virtual reality (VR) and augmented reality (AR) are steadily migrating into the mainstream, which offers another “new platform” market opportunity potentially on-par with the boom resulting from the original mobile gaming market. Blockchain and web3 gaming, in the same vein, exploded onto the scene in 2021. Despite substantial corrections in 2022, the digital asset gaming industry remains one of the blockchain economy's most highly performing and well-invested segments.

Fnatic, initially established in 2004, has led its high-performance esports brand to more than 200 championship victories spread across over 30 different games, accruing an impressive array of talented gaming athletes and millions of dedicated fans in the process. In early 2022, Forbes listed Fnatic as one of the world’s top 10 most valuable esports companies. Fnatic’s dual focus on technology and esports talent curation has kept them in the mainstream for nearly two decades of success, which we believe is a testament to their operational excellence. It also sets the stage for Fnatic to step on the pedal to accelerate its growth as one of the world’s most valuable gaming brands amidst a shifting competitor landscape.

As of 2022, around half of the global population is estimated to play games. Let's consider adjacent technological innovations (VR/AR and blockchain) in parallel with increasing public adoption of digital-first lifestyles. We can paint a clear picture of a future where the current number of self-identified “gamers” gently climbs to nearly one hundred percent of the global population. Gaming markets are historically recession-resistant, and increasingly high user numbers cement the sector as being here for the long haul. Gaming-native businesses like Fnatic are best poised to bring cutting-edge products to that sticky market.

Fnatic aims to bring its decades of operational excellence into the future of gaming, which includes deploying digital collectibles and other blockchain-enabled products. Fnatic’s technology platform aspirations underscore a continued drive for superior gaming-centric user experiences in the marketplace, which we expect to be well-received by an increasingly educated user base. We at Hivemind Capital led Fnatic’s recent investment round, given our expectation that Fnatic’s continued high performance will have an outsized impact as the gaming industry sees gains from technology-adjacent developments, macro trends around consumer gaming behavior, and the continued need for high-quality user acquisition channels in younger demographics. The veteran team has captured the hearts of millions over its years of gaming dominance. As the digital world continues to develop, we’re ecstatic to support Fnatic as they build out the future of esports.