Image Credits: Mark J. Terrill / AP
Esports, video games and the innovations that enable them now occupy a central space in the cultural and commercial fabric of the tech world.
For the investment firm Bitkraft Esports Ventures, the surge in interest means a vast opportunity to invest in the businesses that continue to reshape entertainment and develop technologies which have implications far beyond consoles and controllers.
Increasingly, investors are willing to come along for the ride. The firm, which launched its first fund in 2017 with a $40 million target, is close to wrapping up fundraising on a roughly $140 million new investment vehicle, according to a person with knowledge of the firm’s plans.
Through a spokesperson, Bitkraft confirmed that over the course of 2019 it had invested $50 million into 25 investments across esports and digital entertainment, 21 of which were led by the firm.
The new, much larger, fund for Bitkraft is coming as the firm’s thesis begins to encompass technologies and services that extend far beyond gaming and esports — although they’re coming from a similar place.
Along with its new pool of capital, the firm has also picked up a new partner in Moritz Baier-Lentz, a former Vice President in the investment banking division of Goldman Sachs and the number one ranked esports player of Blizzard’s Diablo II PC game in 2003.
While at Goldman, Baier-Lentz worked on the $67 billion Dell acquisition of EMC and the $34 billion acquisition of RedHat by IBM.
The numbers in venture capital — and especially in gaming — aren’t quite at that scale, but there are increasingly big bets being made in and around the games industry as investors recognize its potential. There were roughly $2 billion worth of investments made into the esports industry in 2019, less than half of the whopping $4.5 billion which was invested the prior year, according to the Esports Observer.
As Ethan Kurzweil of Bessemer Venture Partners told TechCrunch last year:
“Gaming is now one of the largest forms of entertainment in the United States, with more than $100B+ spent yearly, surpassing other major mediums like television. Gaming is a new form of social network where you can spend time just hanging with friends/family even outside of the constructs of ‘winning the game.’”
Over $100 billion is nothing to sneer at in a growing category — especially as the definition of what qualifies as an esports investment expands to include ancillary industries and a broader thesis.
For Bitkraft, that means investments which are “born in Internet and gaming, but they have applications beyond that,” says Baier-Lentz. “What we really see on the broader level and what we think bout as a team is this emergence of synthetic reality. [That’s] where we see the future and the growth and the return for our investors.”
Baier-Lentz calls this synthetic reality an almost seamless merger of the physical and digital world. It encompasses technologies enabling virtual reality and augmented reality and the games and immersive or interactive stories that will be built around them.
“Moritz shares our culture, our passion, and our ambition—and comes with massive investment experience from one of the world’s finest investment firms,” said Jens Hilgers, the founding general partner of BITKRAFT Esports Ventures, in a statement. “Furthermore, he is a true core gamer with a strong competitive nature, making him the perfect fit in our diverse global BITKRAFT team. With his presence in New York, we also expand our geographical coverage in one of today’s most exciting and upcoming cities for gaming and esports.”
It helps that, while at Goldman, Baier-Lentz helped develop the firm’s global esports and gaming practice. Every other day he was fielding calls around how to invest in the esports phenomenon from private clients and big corporations, he said.
Interestingly for an esports-focused investment firm, the one area where Bitkraft won’t invest is in Esports teams. instead the focus is on everything that can enable gaming. “We take a broader approach and we make investments in things that thrive on the backbone of a healthy esports industry,” said Baier-Lentz.
In addition to a slew of investments made into various game development studios, the company has also backed Spatial, which creates interactive audio environments; Network Next, a developer of private optimized high speed networks for gaming; and Lofelt, a haptic technology developers.
“Games are the driver of technological innovation and games have prepared us for human machine interaction,” says Baier-Lentz. “We see games and gaming content as the driver of a broader wave of synthetic reality. That would span gaming, sports, and interactive media. [But] we don’t only see it as entertainment… There are economic and social benefits here that are opened up once we transcend between the physical and the digital. I almost see it as the evolution of the internet.”
Airbnb gets US$1bn investment for post-virus recovery – CTV News
SAN FRANCISCO, UNITED STATES —
Airbnb on Monday announced it was taking a billion U.S. dollars in new investment to endure and, it hopes, thrive in a travel world transformed by the coronavirus pandemic.
Silver Lake and Sixth Street Partners will invest the money into the home-sharing platform in the form of debt and equity, according to Airbnb.
“While the current environment is clearly a difficult one for the hospitality industry, the desire to travel and have authentic experiences is fundamental and enduring,” Silver Lake managing partner Egon Durban said in a release.
“Airbnb’s diverse, global, and resilient business model is particularly well suited to prosper as the world inevitably recovers and we all get back out to experience it.”
The fresh resources will enable the San Francisco-based company to invest in its community of “hosts” as well as local experiences provided along with stays in homes, according to Airbnb co-founder and chief Brian Chesky.
Airbnb said it will focus particularly on long-term stays, from students needing housing to remote workers, building on a rising demand the platform has seen as people self-isolate during the pandemic.
Terms of the investment include putting $5 million into a Superhost Relief Fund for established, highly-rated hosts who need help with rent or mortgage payments due to the coronavirus’s devastating effects.
Airbnb employees started the fund with a million dollars, and the two co-founders contributed another $9 million, according to the company.
Airbnb is also helping hosts with financial losses after guests cancelled travel plans.
Carnival Stock Soars 20% on Saudi Investment and New Liquidity Assessment – Motley Fool
Embattled cruise line operator Carnival (NYSE:CCL) is sailing higher Monday after Saudi Arabia’s sovereign wealth fund disclosed a large stake in the company and analysts suggested it has sufficient liquidity to survive through November even if it’s unable to sail any ships.
The two new developments sent Carnival’s stock soaring almost 20% in morning trading.
Not quite smooth sailing
The Public Investment Fund, Saudi Arabia’s official investment vehicle, disclosed it owns 43.5 million Carnival shares, the equivalent of an 8.2% stake in the cruise line operator. It makes the Saudi government the third largest shareholder. Because the sovereign wealth fund share purchase increased its stake above a 5% threshold, it was required to disclose the holding.
Carnival was also bolstered by the news that even though it’s burning through about $1 billion a month, it has plenty of money to survive its cruise ships being idled in port, even under a worst-case scenario.
However, since Wells Fargo analysts see a more favorable scenario developing with at least some of its ships being able to sail again this summer, it foresees Carnival coming out of the coronavirus pandemic in a much better position than many believed. Wells Fargo does see Carnival’s profits taking a hit, with operating cash flow turning negative to the tune of about $2.2 billion this year versus a $5.7 billion in positive cash flow last year.
Carnival raised $6.25 billion in debt and equity last week to make it through the downturn. It also suspended its dividend and halted stock buybacks to preserve cash.
FIRM CAPITAL MORTGAGE INVESTMENT CORPORATION PROVIDES UPDATE ON APRIL 1ST PAYMENT STATUS OF THE INVESTMENT PORTFOLIO – GlobeNewswire
TORONTO, April 06, 2020 (GLOBE NEWSWIRE) — Firm Capital Mortgage Investment Corporation (the “Corporation”), (TSX: FC) discloses that, with the passing of the April 1st payment due dates on its Investment Portfolio, there have been no material increases in terms of arrears since March 1, 2020.
We would like to assure shareholders that the Corporation has been taking proactive action to mitigate the impact of the COVID-19 situation and that at present, even during these challenging times, loan arrears in the Corporation’s Investment Portfolio are not materially different than as at March 1, 2020, and that new defaults after January 1, 2020 are part of normal business operations and not as a result of the COVID-19 situation:
- Of the 111 pre-authorized payments submitted on April 1, 2020; six payments were returned NSF, of which five were replaced, leaving one outstanding payment relating to an investment representing 0.4% of the Investment Portfolio. Management has been in negotiations to resolve it;
- Three payments were not received, all relating to one borrower on three investments, representing 1.4% of the Investment Portfolio. That same borrower has historically always paid by month end. Management is not concerned given the loan-to-value exposure; and
- Management has been managing and addressing seven loans which are currently under legal workouts initiated before April 1, 2020, with one loan being sold under enforcement proceedings, closing April 30, 2020 with the full repayment of principal and interest.
The Corporation’s Mortgage Banker minimizes risks associated with defaulting mortgages through diligent monitoring of the Investment Portfolio, active communication with borrowers and the implementation of appropriate and timely enforcement procedures on defaulted mortgages. The Mortgage Banker has substantial experience in servicing mortgage loans, including the implementation of enforcement proceedings.
Thank you for your continued support!
ABOUT THE CORPORATION
Where Mortgage Deals Get Done®
The Corporation, through its mortgage banker, Firm Capital Corporation, is a non-bank lender providing residential and commercial short-term bridge and conventional real estate financing, including construction, mezzanine and equity investments. The Corporation’s investment objective is the preservation of shareholders’ equity, while providing shareholders with a stable stream of monthly dividends from investments. The Corporation achieves its investment objectives through investments in selected niche markets that are under-serviced by large lending institutions. The Corporation is a Mortgage Investment Corporation (MIC) as defined in the Income Tax Act (Canada). Accordingly, The Corporation is not taxed on income provided that its taxable income is paid to its shareholders in the form of dividends within 90 days after December 31 each year. Such dividends are generally treated by shareholders as interest income, so that each shareholder is in the same position as if the mortgage investments made by the company had been made directly by the shareholder. Full reports of the financial results of the Corporation for the year are outlined in the audited financial statements and the related management discussion and analysis of Corporation, available on the SEDAR website at www.sedar.com. In addition, supplemental information is available on Corporation’s website at www.firmcapital.com.
The Corporation has provided the above information in response to various enquiries received from shareholders and other stakeholders. Unless otherwise required by applicable securities laws, the Corporation does not intend, nor does the Corporation undertake any obligation, to update or revise any information contained in this press release or to provide any additional information, similar or otherwise, to reflect subsequent periods, information, events or circumstances, or otherwise.
For further information, please contact:
Firm Capital Mortgage Investment Corporation
President & Chief Executive Officer
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