Saudi Arabia’s wealth fund has made its first major foray into the Chinese games market, betting on a Tencent Holdings Ltd.-backed esports tournament organizer.
(Bloomberg) —
Saudi Arabia’s wealth fund has made its first major foray into the Chinese games market, betting on a Tencent Holdings Ltd.-backed esports tournament organizer.
Savvy Games Group, a unit of the Public Investment Fund, invested $265 million in VSPO, which promotes and runs competitive gaming events for titles such as League of Legends and PUBG. The Shanghai outfit, formerly known as VSPN and also backed by Sequoia China and Susquehanna International Group, didn’t disclose its valuation in the Series C round. Savvy now becomes VSPO’s single largest equity holder, according to a statement Thursday.
The funding could help VSPO reboot pro-gaming in China after a two-year lull, when pandemic restrictions and Beijing’s clampdown on the internet sector chilled the world’s biggest games arena. Close collaborator Tencent is planning to launch a Valorant esports league when the hit shooter debuts in China this year, which will likely add to VSPO’s event roster.
The six-year-old startup has been through a couple of faltering attempts at an initial public offering. It had considered a US IPO in 2021, and then filed in Hong Kong last year, during Beijing’s tightening scrutiny over offshore listings.
Tencent was VSPO’s largest client and external investor with a 13.5% holding in the company, according to the firm’s pre-listing document in January 2022. In the first three quarters of 2021, VSPO’s revenue jumped 144% to 1.3 billion yuan ($190 million), the filing said, via businesses like organizing tournaments, sponsorships, and running fan pages.
VSPO has more than 1,400 employees in cities from Shanghai to Chengdu and Seoul, and is planning to open new offices in Los Angeles and Riyadh, it said in a deck to investors. The company said it’s involved with more than 70% of China’s esports competitions.
The Riyadh outpost will be especially pertinent to Savvy, whose strategic purpose is to help “make Saudi Arabia the ultimate global hub for the games and esports sector by 2030,” according to crown prince and Savvy chairman Mohammed bin Salman. The group has a $38 billion budget for the task and its parent PIF has built up stakes in listed gaming powerhouses like Activision Blizzard Inc. and Nintendo Co. Activision’s former head of worldwide studios, Brian Ward, is the chief executive officer of Savvy, while longtime Ubisoft Entertainment SA veteran Yannick Theler leads the in-house Savvy Games Studio.
Read more: Saudi Arabia Outlines Plans to Invest $38 Billion in E-Sports
VSPO founder and CEO Dino Ying started his career as a Standard Chartered banker before delving into the gaming sector as president of China Mobile Games Entertainment. In 2015, he founded Shanghai-based Hero Games to develop and publish mobile titles. VSPO was set up a year later, with its original name VSPN conveying the aspiration to be the ESPN for pro gaming, a multibillion-dollar market.
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