How esports org 100 Thieves will boost its M&A strategy with $60M in Series C funding

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 we’ve leaned into these acquisitions,” said ReKTGlobal chief creative officer Kevin Knocke, “especially because the acquisitions that we’ve been doing were profitable, revenue-bearing companies, in an industry where there wasn’t a lot of stability.”

At the moment, 100 Thieves isn’t planning to follow a similar path. But it is far from the only prominent esports organization to indicate interest in ramping up M&A in recent months. Shortly after FaZe Clan went public in October, its CEO Lee Trink told Digiday that the organization would use the funds it raised to acquire other companies. “We’ve had early success in both apparel and non-apparel, and we’re going to fuel that,” Trink said. “There will also likely be acquisitions in that category.”

While 100 Thieves’ M&A strategy is not as far along as organizations such as Enthusiast Gaming, which owns the prominent esports team Luminosity Gaming, 100 Thieves’ focus on philosophical parallels is a wise move, according to Enthusiast CEO Adrian Montgomery. “There absolutely has to be a philosophical alignment,” Montgomery said. “One of the things that we’re very disciplined about is that, when we bring a fan community into the fold, the sum of the parts at Enthusiast is greater than the individual parts themselves.” 

Montgomery cited the example of the well-known online game site Addicting Games, which Enthusiast acquired for $35 million in September. “Within two months of acquiring Addicting Games, if you’re on Twitch, you’ll notice Sodapoppin and xQc and Luminosity creators playing Little Big Snake [on Addicting Games],” Montgomery said. Thus far, the acquisition has paid off: in Q3 2021, the company reported record revenue of $43.3 million and a jump to 207,000 total paid subscribers, an increase that Montgomery said was driven by Addicting Games’ lucrative subscription service.

Whether through focused acquisitions or Berkshire-Hathaway-style expansion, M&A is sure to be a continued component of esports companies’ business plans as they diversify their revenue streams and work to satisfy their investors, public or private. In a gaming and esports landscape filled with young, easily distracted consumers, acquiring new businesses allows the largest esports organizations to stay nimble and relevant — as long as there is a philosophical alignment.

“More than anything, 100 Thieves is very deliberate about what we do and what we don’t do,” Robinson said. “And I think it speaks a lot to our convictions, both in the hardware space as well as with the team at Higround. That is the reason and justification for doing this.”