I’ve down two other reviews of SeedInvest start-ups (Keen Home, and Female Led Start-ups) and this is my third on the company Rivalcade. I am not an investor in any of these companies, but because their business plans are public on SeedInvest and because I’m a big fan of This Week In Startups I can’t help myself.

Market Overview:

The eSports market is forecasted to grow from~700 million in 2017 to 1.5 billion USD by 2020. The idea of becoming a professional gamer becomes less and less ludicrous every year. Further, the concept of eSports is global with local competition in regional areas such as China, Korea, North America, Europe and eventual global competition. Vice has covered the rise of millionaire eSports professionals. Twitch is the most popular way to view live streamed eSports or individual gamers and it was recently acquired by Amazon for 970 million dollars. Further Twitch accounts for just under half of the total live streamed content on the internet. It appears as if eSports is here to stay and it will continue to grow.

Rivalcade’s Mission:

Rivalcade’s mission is to do live events they call “Live the Battle League” in local US markets such as Boston, New York, Chicago, etc. These live events can be broadcasted (cast) on live streaming platforms such as Twitch.

This model has been proven with larger organizations like DreamHack and Intel Extreme Masters that regularly host professional tournament events with total prize pools in the ranges of $300,000 or more for a single game like Counter Strike.

But each of these large events is somewhat fractured where the current systems host tournaments for only specific game titles. Other more popular game times might be run their own events such as League of Legends, Defense of the Ancients 2, and Overwatch. The frequency and location of any of these live events seem to be with semi-regular frequency, but when it comes to a weekly event that a person could attend it just isn’t possible.

Rivalcade wants to remedy this lack of live events by hosting more live events with more frequency and easier to access locations for local markets. While I’ve never attended a live eSports event I imagine it to be similar to attending a live baseball game in that watching something live is infinitely more fun than watching it on a screen. To me attending a live regular season minor league baseball game is more fun than watching a regular season major league game on TV.

Rivalcade Product Road Map:

Weekly Grass Roots Tournaments: Non-professionals can sign up and duke it out for who is the best. Maybe the best Super Smash Brothers in your fraternity could make a few hundred dollars. To me this is the most important even to get right not only because it’s the first, but because it is direct engagement with the target audience. It’s like the rec-center pickup basketball league.

Monthly Major Tournaments: If the grassroots tournaments take off then this appears to be a doubling down on the local scene and further locking down the customer base.

Professional “Show” Matches (eSports Championship Format): If two professional teams decided to do a one-off game in Louisville Kentucky.

Professional “Show” Tournaments (eSports Championship Format): If UFC came to Louisville Kentucky for a paperview

Live the Battle League Launch (eSports Championship Format): Your very own minor league stadium in your local market with regular matches and seasons.

Financials:

The thing about this company that I like is that they are not extremely asset heavy. Whenever there is a supply chain and manufacturing involved the costs can rapidly evolve especially with sole-sourced materials.

Rivalcade as of right now appears to be not needing any large assets aside from some screens, computers, and continuing to increase their online presence. They have a Twitch channel and a YouTube channel and while those channels still seem to be relatively new without large subscriber bases if they can get organic growth then the revenue opportunities from just advertising could be in the millions. Looking at Social Blade’s estimated earnings of two League of Legends Channels: LoL esports and League of Legends is a good example.

So despite the disclosure from the SeedInvest site:

The Company is a business that has not yet generated profits nor significant revenues, has sustained net losses of $145,750 and $32,470 during the periods ended December 31, 2016 and 2015, respectively, and has an accumulated deficit of $178,220 as of December 31, 2016

and that they

Rivalcade has a $75K loan with 12-month amortization. The loan is from Kabbage with an interest of 16.4% and a maturity date of July 21, 2018. This limits the cash flow of the business. A portion of the proceeds from this offering could be used to pay off the debt. Rivalcade currently has $5,400 in cash balance. A successful fundraise will be key for operations. The Company could be harmed if it is unable to meet its cash demands to adequately manage its prize pools, salaries, and marketing demands.

if they can raise this round successfully then I think there is a somewhat good chance that the company can be successful if they can reach their target audience and gain that audience’s attention fast enough. I have no idea about their current burn rate, but the largest uses for money should be going into prize pools and marketing.

What I would love to see:

Partnerships with existing Twitch or YouTube streamers to gain larger audiences…maybe someone like PewDiePie? Running Twitch or YouTube based tournaments with more frequency and getting “regular” people who do not normally participate in these events. Like a tournament of people of skills levels like me aka not very good.

Rivalcade is asking for about 500 minimum for investments from non-accredited and 20k for accredited investors. They have 51 days left to raise their current round as of writing this post on Medium.

Will they make it?

Maybe

Would I invest if I had a spare 500 dollars for speculative investing?

Possibly if I saw they were close to meeting their funding goals for this round.

A crowd sourced round seems somewhat smart though just from a marketing perspective because then people like me write things like this and hopefully people like you read them all the way to the end.

If you thought this was good give me a clap or comment below. Thanks for reading.