100 Thieves’ decision to pursue mergers and acquisitions reflects an increase in M&A activity that is already underway across the esports industry. As esports companies expand their offerings in search of cohesive and profitable business models, the acquisition of new companies can help bring in fresh ideas and new revenue streams.

Before acquiring Higround, 100 Thieves had never acquired another company, preferring instead to partner or license with separate operators in the industry. But early conversations between 100 Thieves and Higround founder Rustin Sotoodeh revealed a slew of parallels between the companies’ design-first philosophies. After a few handshakes, the Higround crew began setting up shop in a corner of 100 Thieves’ Los Angeles headquarters. “We thought, ‘let’s create a really awesome brand that celebrates gaming culture and elevates it.’ And as soon as 100 Thieves heard that, they were like, ‘oh, shit, that’s literally what we do with apparel,’” Sotoodeh said. “So it was a match made in heaven.”

Before 100 Thieves acquired Higround, M&A was not a priority for the organization, with a streetwear-inspired aesthetic that gained it legions of fans within both the creator and competitive sides of the gaming community. “100 Thieves didn’t have a deliberate M&A strategy, where we were going out and looking for acquisition opportunities to grow the business,” said 100 Thieves COO John Robinson. “Our existing business is doing extremely well across all the verticals that we have.”

This is no longer the situation at 100 Thieves. Its first merchandise drop in conjunction with Higround, a capsule collection of keyboards and apparel, sold out in a matter of minutes. With the success of its first acquisition still fresh in mind, 100 Thieves hopes future deals can lead to similar outcomes. “The Higround acquisition is illustrative of the types of expansion opportunities we see for 100 Thieves,” Robinson said. “We expect to earmark a significant portion of the Series C raise for additional acquisitions and launching new businesses.”

Over the past few years, M&A activity has increased slowly but steadily within the gaming and esports space. Mergers and acquisitions can be particularly helpful for esports organizations, some of which have pivoted to become one-stop-shop event production firms or brand studios, rather than mere competitive teams emulating traditional sports companies.

These days, veteran esports organizations such as Enthusiast Gaming and ReKTGlobal are vying to become the Berkshire Hathaways of esports, acting both as owners of competitive teams and holding companies containing a diverse array of businesses. “Informally, from my perspective, I’ve seen our investor activity increase the more …read more

Source:: Digiday

Author: Aaron