London-based Hiro Capital launches a €100 million fund for UK and EU gaming and esports startups

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London-based Hiro Capital launches a €100 million fund to back the future UK and EU leaders in the global games, e-sports and digital sports. Leading a team with more than 100 years collective experience in these sectors, the partners will use the fund to accelerate the growth of about 20 UK and European games and sports innovators.

Hiro Capital will generally invest at the post-seed stage, at Series A and B. The fund will back deep technology entrepreneurs and creative studios in games, esports and digital Sports and in sector-specific applications of cloud, mobile, streaming, big data, AI, wearables, AR and VR technologies.

By covering all three sectors of games, sports and esports, Hiro Capital strikes a balance of sector-focused pattern-recognition with a wide breadth of opportunities and scale.

Hiro offers macro exposure to three of the fastest growing sectors of the new economy, with over 20 years of tailwinds ahead, combined with exclusive deal flow thanks to the entrepreneurial backgrounds and reputations of the founders.

“Fifteen years ago, the video games sector was niche, esports was underground and digital sports tracking was only available to elite athletes,” said Luke Alvarez, managing partner of Hiro Capital. “Now there are three billion gamers globally, 600 million game stream fans, and over 500 million sports monitoring smart watches and trackers. Today’s consumers play games, watch streams and post sports stats every day and rarely watch terrestrial TV. 2018/2019 have been breakthrough years for these sectors – from record-breaking streaming events in Fortnite and the real FIFA World Cup, to the recent announcements of Apple Arcade, Google Stadia, the Apple Watch 5, Facebook Horizon and Alibaba+Intel’s AR/VR Athlete tracking for the Tokyo Olympics…

“Games, Esports and Digital Sports are becoming a fundamental ecosystem for entertainment, economic and social life in the mid-21st century. Hiro invests in the innovators who are building that future – they are our heroes.”

In 2018, global revenues in the games, esports and digital sports sectors exceeded those in music, video and Hollywood combined, and the UK and the EU is a leading creator of the content and tech which drive that growth. Last year, Europe produced 123 PC and console games titles compared to Asia’s 103 and America’s 78. Many of the world’s major sports leagues and sports tech innovators are EU/UK led, and half of the top 30 mobile games worldwide are EU and UK developed. In the UK alone, there are 2,500 games studios.

However, only 2% of these studios receive any form of VC funding and Europe’s total generalist VC investment in 2018 was a mere 20% of that seen in the US – $21 billion versus $102 billion – with only a fraction going to games and sports technology.

This highlights the significant gap in local growth capital, especially in the post-seed €1 million to €20 million ticket range. This supply and demand mismatch creates an investment gap and Hiro Capital fills this gap.

“Having played a major part in building two billion games companies in my career and having angel invested in many mobile games superstars, I have witnessed first-hand the frustration of battling the post-seed Capital Gap,” said Ian Livingstone, partner. “Through investing and nurturing the right talent in Europe and the UK, our goal is to generate great returns for our investors and bring much-needed capital to the industry. We are focused on innovative games and games technologies. We’re gamers at heart and strongly believe in the positive power of play culturally, socially and economically.”

As well as financial investment, Hiro Capital works with its entrepreneurs to help them scale, from assisting in early-stage planning and product development, to strategy, global expansion and exit timing.

Managing partner Luke Alvarez was co-founding CEO & president of Inspired Entertainment, a Nasdaq-listed mobile games and virtual sports technology company, as well as a co-founding non-executive of The Cloud Network, the EU’s largest public access wi-fi operator.

Ian Livingstone is the former chairman of Eidos plc, the publisher of Tomb Raider, and is often referred to as the ‘father’ of Lara Croft. In the 1970s, Ian co-founded Games Workshop and brought Dungeons & Dragons to Europe. In the 1980s he co-created and wrote the Fighting Fantasy gamebook series which has sold in excess of 20 million copies worldwide. In 2002, Ian won the BAFTA Interactive Special Award for his outstanding contribution to the industry and was appointed an Officer of the Order of the British Empire (OBE) in the 2006 New Year Honours, followed by Commander of the Order of the British Empire (CBE) in the 2013 New Year Honours for services to the computer games industry. Ian has recently been a successful angel investor in several leading game developers including Playdemic, Fusebox and Mediatonic, and is the non-executive chairman of Sumo Group plc, one of the largest independent video games developers in Europe.

Rated ‘Britain’s Coolest Female Founder’ by Business Insider in 2017, partner Cherry Freeman, is the co-founder of global community and e-commerce brand LoveCrafts and has spent 10 years working with venture-backed tech companies including Mimecast and New Voice Media. She is a judge at Tech Nation and a contributor to Tech Nation’s ‘Upscale: what it takes to scale a startup, by the people who’ve done it’.

“The scaling opportunities combined with the capital efficiency in the games and sports technology sectors make it a uniquely exciting arena,” said Cherry Freeman, partner.  “You can start from nothing and end up on a billion handsets in a year. If you’ve got an idea, you can talk to the entire planet. There are very few sectors which are totally global, totally consumer facing and instantly scalable and our new fund will be looking to tap into this potential to discover the next-generation of trailblazers. The Hiro team have founded games, sports and tech startups worth over $5 billion between us. We support our entrepreneurs on their heroic journeys from startups to global stars.”

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