Fantasy sports is big business. Fantasy esports is a smaller, but quickly growing younger sibling. Vulcun, currently boasting a multi-million-dollar prize pool, wants to make fantasy esports the next big thing, and now has the cash on hand to pull off its dream: A host of venture capital firms and angels just participated in a $12 million Series A round of capital for the company, including Sequoia, which led the deal.
I spoke to Vulcun about its capital raise, and was told that the monies will go to building out its network of supported games. The company has no short-term plans to spend a chunk of its new capital on a large promotion event, it told TechCrunch.
Vulcun likes to compare itself to firms that operate a similar business but with traditional sports, like DraftKings, which offer daily payouts to fantasy players. Vulcun takes a 15 percent commission of wagered funds between groups of fantasy players.
Fantasy sports betting is legal in the United States, as it is viewed as a game of skill, and not luck. Online poker, on the other hand, has the opposite status, which is a crux of the argument for its current illegality.
The company, and its fundraising, are both bets on esports in the macro sense. Competitive gaming, through titles like Starcraft 2, League of Legends, and CS:GO, has become a material entertainment segment. It remains just north of nascent. Amazon’s $1 billion purchase of Twitch, a popular game-streaming service, added fresh legitimacy to the content varietal, but remains only a single transaction.
Vulcun currently has a $4 million 2015 guaranteed prize pool, of which it has paid out more than $750,000 in the past 10 weeks, according to its website.
Fantasy sports are popular. Esports is increasingly popular. The combination is a decent wager. Provided that current trends can hold, Vulcun could be on a lucrative path. But if consumer interest in esports flags, it won’t have too many places to turn.