Chinese esports startup VSPO raises $265M funding from Savvy Games
VSPO, a Chinese startup that organizes esports tournaments, has raised $265 million in funding from Saudi Arabia’s Savvy Games Group, a video game and esports company.
The Shanghai-backed organization said it would finalize the deal in a few months. With the agreement, Savvy will become the largest equity holder in VSPO after completing all necessary “regulatory clearances and approvals and the satisfaction of other closing conditions.”
VSPO explained that the money would fund research and development activities related to extended reality and artificial intelligence technologies.
Ying “Dino Ying” Shuling, founder and chairman of VSPO, expressed his enthusiasm for the collaboration. He said the corporation would hasten its international expansion with an emphasis on the Middle East and Saudi Arabia.
CFO and co-founder Danny Tang commented on the investment, saying that the funding is a significant step in developing the global esports sector and highlights the great possibilities for growth within a relatively young industry.
Tang added that given esports global popularity, having the endorsement of Savvy, whose aspirations align with that of VSPO, is highly motivating for their collaborative aim to advocate for esports as a global community, not just a sport.
He explained that while mobile esports has grown significantly in the previous decade, particularly in China, “the industry is still in its infancy.”
VSPO, formerly known as VSPN, was founded in 2016. The company said it has participated in more than 70 percent of China’s major esports competitions and half of the world’s.
Savvy is not the only major stakeholder in VSPO. Tencent led a $100 million Series B round in 2020. This funding was followed in 2021 by two multi-million dollar investment rounds in January and June.
Over the last decade, VSPO has also established partnerships with several regional developers other than Tencent, including Garena and Krafton.
The startup has held over 10,000 professional esports events and established venues in Shanghai, Chengdu, Xi’an and Seoul.
Extending Savvy’s influence globally
Per Saudi Arabia’s Vision 2030, the country plans to become a hub for worldwide competition in gaming and esports by the end of this decade. Savvy’s agreement with VSPO is consistent with that purpose.
Savvy, wholly owned by the Public Investment Fund of Saudi Arabia (PIF), said in September 2022 that it would acquire a major game publisher and invest in prominent esports organizations as part of a $37.9 billion investment strategy.
Savvy CEO Brian Ward explained that this investment is a substantial “strategic investment for Savvy” in one of Asia’s leading esports organizations.
He explained that this investment is part of Saudi Arabia’s long-term commitment to building a “healthy global esports community and further positioning the Kingdom” as a major global center for gaming and esports.
Ward said that the deal also represents the most significant financial “investment ever made in an esports organization” and demonstrates their belief in the potential of this rapidly rising sector.
The CEO added that with Savvy’s investments, they hope to play a big part in the growth and development of the global gaming industry by allowing technological innovators like VSPO to promote broader and “more equitable access to the dynamic esports market.”
Saudi Arabia has about 23.5 million gamers and esports players, accounting for almost 70 percent of the country’s total population.
Savvy bought Western esports tournament giants ESL and FACEIT for $1.5 billion in January 2022. By acquiring VSPO, Savvy can expand its event offerings into China and other emerging regions.