North American esports organization Envy Gaming made a big announcement in March 2021, unveiling that they had raised $40 million in investment from TV company Gray Television.
Typically, at the stage Envy are at, companies can go one of two ways. Following a Series C round, they tend to either prepare to become publicly listed by bolstering all of their current initiatives or they undergo mass growth through acquisitions and developing new business arms.
With franchises in Call of Duty League and Overwatch League, and a long legacy in place with the core brand of Envy Gaming, the question of where the company plans to go became very interesting following this investment.
I had a bunch of theories of where Envy could go next. With teams like Astralis and Guild having already gone public, and teams like TSM utilizing supplementary businesses to generate revenue, the possibilities seemed endless. Instead of creating what would be essentially fan-fiction through reckless speculation, I thought it’d be best to speak to Envy CEO Adam Rymer to find out what’s actually on the horizon.
The next era of Envy
This investment doesn’t necessarily mark the beginning of a new phase for Envy, you could build a solid case that they’re already in the middle of growth. Ever since Rymer was brought in as CEO as long-time leader Mike ‘Hastr0’ Rufail stepped down to become chief gaming officer, Envy have made some interesting moves.
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“We’re in an exciting phase of esports growth,” Rymer said. “We’re starting to see some companies really emerge as bigger presences across the board in esports, gaming, and lifestyle. This investment gives us a real opportunity to be in that conversation. For us, it’s staying true to who we are as Envy, our history of competing and success, and making sure that if something’s not working on the competitive side we make the changes and address it. We’re still 100% dedicated to that, but that’s what gives us the foundation to really build a bigger engagement platform with our audience.”
Falling in line with many other organizations, they’ve since made big strides in the arena of content creation and influence. The organization has signed chess prodigies the Botez sisters, former Call of Duty world champion Tyler ‘TeeP’ Polchow, TikToker Sebas Beron, and Warzone streamer BobbyPoff. They even welcomed music superstar Post Malone as an investor in August 2020.
While competition has always been important to Envy, and it remains as such, they’ve realised that there are additional methods of building a brand, engaging existing fans, and acquiring new ones. They’ve been fleshing out this pillar of their business.
“We are in a place where fans of esports are fans of a bunch of different teams, players, and streamers,” Rymer said. “We’re trying to work on how Envy ties into that by bringing on more content creators who can support what we’re doing on the gaming side. We have some announcements coming that are related to casual players where Envy can take a bigger role in bringing those audiences together and bringing the gaming audience to a bigger set of brands and areas outside of just the core competitive space.
“One of the things that we are in full agreement with Gray is taking some risks and trying something. If it fails, then fail quickly and look at the things that work and go after them in a bigger way. That’s essentially what we’re after now. I don’t think any of us have really considered the next investment phase or any of those strategies just yet, the focus is on what are we doing tomorrow with the resources that we have to grow the business and revenues.”
Beyond capital, what can Gray bring to Envy? They’re a legacy broadcast company with roots in traditional forms of media. Envy are a new-age media company, for all intents and purposes, that exists mainly in digital mediums. On the surface, that may be a difficult question to answer.
“They have a different set of skills than we do from an audience development perspective, but there are also areas where there’s a lot of great overlap,” he explained. “They are a local broadcaster and there is a lot of local sponsorship and advertising deals there. We’re looking forward to working together with them on monetizing locally in an amazing way. They also have phenomenal production capabilities.
“You can probably identify a whole lot of things that would make watching any of these games a lot more exciting and fun and interactive and participatory, especially for non-endemic audiences. How do you make Call of Duty exciting for someone who’s never played it before? How do you make Overwatch exciting? We’re hoping that we can work together on figuring some of those things out but we’re not forcing anything to happen together with them right now.”
Gathering data and making acquisitions
While the core pillars for many esports organizations include competition, content, and merchandise, Envy, Team Liquid, and Cloud9 have started building out another pillar that may soon be standard across the industry. Fan engagement initiatives such as Liquid+ and EnvyUS hope to reward avid supporters with unique perks in exchange for a small subscription fee. As well as making these fans feel truly part of a community, it helps the orgs to better understand their interests, demographics, and much more. This, in theory, can help to inform future decisions with success being less of a gamble.
“It is an extremely important part of the future of our business,” Rymer told me. “Knowing who our fans are, especially when they are distributed across multiple social channels, is a critical piece of how an organization stays relevant in the future. One of the things I strongly believe in is ‘don’t forsake perfect for the sake of the good.’ So, for me, it was just getting something out there, start learning, start talking to the people who sign up, and start figuring out how we can be better at it.
“So far that’s been working great. We’ve been iterating and we’ve got a roadmap now of how to make that a much more engaging, exciting, and integrated opportunity that goes across all of our brands, our creators, and especially our live events. When live events start to come back is when you’ll start to see those kinds of membership programs become a lot more useful because we’re ready to offer some really nice features and benefits to members.”
It’s easy to see these initiatives as a play to monetize fans, but it runs deeper. When a user signs up, they have to give some basic information — information that can be crucial in understanding demographics and how best to serve those who truly support you. Envy are making a play to establish themselves as synonymous with esports in Texas but that doesn’t mean they’re neglecting to get to know their international fans.
“It’s not getting data for the sake of data,” he answered. “It’s all about value exchange. My goal is to recognize that, unlike other sports, our fans are all interacting with us digitally. So if I’m not figuring out how to get to know them where they are then I’m just sitting there passively, waiting for somebody to tap me on the shoulder and say ‘Notice me and do something for me.’
“If I send you an email about every single thing my teams are doing, you’re going to zone out extremely quickly. But if you tell me that you’re a huge fan of the Dallas Empire and that’s it, I’ll make sure that that’s what you’re seeing. There might be ways for you to get involved in other aspects of the org, but I’m not going to force you to do that.”
In search of avenues of esports that can actually generate profit — it’s not so easy making that happen strictly from competition — organizations such as FaZe Clan and 100 Thieves are focusing intently on personality-based content and selling merchandise.
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Hastr0, a competitor in Call of Duty himself many years ago, made his stance on this approach known on Twitter in January 2021 by throwing some side-eye at these so-called “hoodie selling orgs.” The past few months of Envy’s development suggests they too see the benefits in investing in revenue streams outside of competing, so I reminded Rymer of this situation and asked whether his org can now be considered a ‘hoodie org.’
“Of course, why not want to be everything? If you look at what’s happened over the last year we’ve really started to expand our content business and the creators that we’re working with,” he said. “I think 100 Thieves is onto something and has done a phenomenal job with being able to engage and activate their fan base.
“If you’re an esports org, you have to be in esports. And if you’re going to be in esports, you have to be in the areas that people are excited about. We’ll all have our unique spins on what our brand means and what it represents and what offerings we have for our fans. Look, it’s all in jest and now is not the time for anyone to be criticizing another org’s business model. There’s so much room to continue to grow and find new opportunities. If anything, I’m looking forward to ways that we can work together.”
Acquisitions aren’t uncommon once a company has closed their Series C round, so naturally I thought about all of the potential avenues Envy could go down in this regard. Could they establish a talent management arm like TSM, perhaps they want more franchise slots, or is now the time to get into software and infrastructure?
Envy famously missed out on securing one of the 10 long-term partnership slots in Riot Games’ North American competition, the LCS, and it’s rumored that more slots will be up for grabs in the coming years, so is a re-application possible? Rymer discussed all of these potential moves.
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“When we look to invest in something, one of our big avenues is how can Envy help grow that business,” he said. “I’m not looking to be a venture capitalist and just say ‘Hey, there’s an awesome thing out there that I can make a billion dollars on.’ We’re looking for things that can help the development of esports as a whole and what you’ll find is most of the things that we’re interested in investing in, I would love nothing more than to have other organizations invest in the same thing. How can I help develop companies that are supporting what all the organizations are trying to do?
“We’re lucky because we’re in a position where we see a lot of these opportunities. All things are on the table but it’s whether we can accelerate the growth and incubate something in a way that a traditional Silicon Valley venture capitalist couldn’t. We look at the data, we look at the audience size, we look at our local audience and try to understand if people in Texas going to be excited about watching this and being part of it. It’s not just about clout for us. We’re going to keep watching what the cost is of being in those leagues, how player salaries and audiences are increasing, and what the likelihood is of actually succeeding within those leagues. It’s an area that we are definitely interested in.”
In 2019, Envy was valued at $170m according to Forbes. In 2020, they didn’t make the list despite the 10th-ranked organization being valued at $150m. That suggests the organization has dropped off massively — or that they didn’t want to play ball with the publication and are happy to keep working without the hype that that list often generates.
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“We believe in having our actions speak for us in this regard,” Rymer said of’s Envy’s exclusion from last year’s list. “Raising the money from Gray — who is a sophisticated investor and was able to look under the hood and see some of the things that we’re working on — implies that there are some things that are happening coming down the pipe which have real meaningful asset value attached. We’re a little unique.
“Not every team can say that they’ve got as core of a location-based strategy as we do. We’re very focused in Texas. There are different gaming platforms, different esports organizations, different games and publishers and monetization strategies. Who’s right? Who’s wrong? I don’t know for sure. We’ll see what happens over the next couple of years but we feel good about where we are and we feel good about who we’re competing against. To be able to continuously go up against some of these other guys on a regular basis is what’s going to create fandom for esports in a way that hasn’t really existed as strongly before.”
Envy are intent on forging a new path for themselves, forgoing being just a trophy-hunting organization and more a fully-fledged media outfit. Their recent signings, and the significant $40m investment, suggests Rymer has plenty up his sleeves for 2021 and beyond.