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Could digital funding platforms have helped FanClash raise $40 million?

The ever-growing esports market gained another major player in June 2022 when Indian startup FanClash obtained $40 million (£33 million) worth of venture capital funding. The two-year-old fantasy sports platform gives users the chance to enter competitions and win prizes. How? Like any fantasy sports platform, the aim is to pick the best players and earn points based on their results.

The top pickers win a share of the competition’s prize pool. In essence, FanClash has taken the model used by brands like DraftKings and focused it on esports. With the number of Indians watching esports projected to hit $85 million by 2025, there’s clearly a market for FanClash.

There’s also clearly a market for funding projects within the sector. 100 Thieves, a gaming brand and esports team, has raised $120 million (£100 million) throughout three funding rounds and is now one of the leading names in the industry. FanClash is aiming to do something similar.

FanClash goes the traditional route

With the help of Alpha Wave Global and Sequoia Capital India, FanClash raised $10 million in Series A funding before its latest round of investment. The $50 million+ (over £41 million) it received is being used to develop the platform, increase the company’s profile and explore opportunities in other markets, including the Philippines.

What’s interesting about the route FanClash took is that it differs from the way an increasing number of companies are securing new investments, i.e. digital funding platforms. It’s interesting because FanClash is a tech-based company that’s not averse to modern innovations.

Of course, there’s no obligation to use so-called “modern” methods for raising capital. Outsourcing the process to established investment companies like Sequoia Capital and enlisting the help of legal firms is a tried and tested way of funding a startup. However, exploring the potential of modern methods seems like a natural step for companies that are already rooted in digital tech.

In fact, it’s a route that a lot of successful companies have taken in recent years. Official data from Kickstarter shows its platform has attracted over 21 million backers since it launched in 2009. Among the 223,000+ projects that have successfully received funding, many have gone on to thrive.

Digital funding platforms power multi-billion-dollar companies

As profiled by Forbes, companies such as wireless headphone producer Bragi and virtual reality company Oculus (later acquired by Meta) are among the most successful Kickstarter alumni. Also operating in the digital fundraising space is SeedLegals. As of May 2022, startups had closed £1 billion worth of investments through the platform. SeedLegals is an example of how much the digital funding sector has developed. While Kickstarter provides a place to raise capital, SeedLegals goes a few steps further.

They help startups close and manage investments from seed funding and beyond by automating the legal and administrative side of things. From generating customised legal documents that can be e-signed easily, to automatically-updating cap tables, SeedLegals simplifies the fundraising process for founders and cuts costs on administrative services. Modern funding platforms like this offer more than opportunities to raise capital for any size business, they help you manage investments and improve the overall efficiency of your business too.

FanClash didn’t go down this route, but it could have done. Even with a multi-million-dollar investment round, India’s fastest-growing esports team didn’t need to use what could be called “traditional” methods of raising money.

Outsourcing the various aspects of the funding process is fine, for now. However, the process is, like so many things, changing. With technology streamlining startup funding from beginning to end and making multiple tasks possible via a single platform, we may see esports companies of the future embrace their digital roots and go the digital funding route.

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