(Courtesy Nerd Street Gamers)
Esports company Nerd Street Gamers, which announced last year it was building a massive, 40,000 -square-foot HQ on North Broad Street, announced Tuesday that it raised $11.5 million in a new funding round that will help it to keep up with growth.
The round was led by San Francisco-based VC firm Founders Fund. Nerd Street Gamers CEO John Fazio told Technical.ly that he and Founders Fund head Brian Singerman “hit it off,” and that Singerman was “so clear on Nerd Street’s vision” from the first meeting.
Fazio said he’d spent time in years prior taking meetings with investors in Silicon Valley. But it wasn’t until a virtual meeting with Founders Fund in 2020 that the company really entertained a non-local investor.
“He was finishing my sentences,” Fazio said of Singerman. “He understood what we were doing so intrinsically.”
The funding will help the company stay on a path of quick growth, and continue building out its tech platform. The business was always structured around a tech platform with brick and mortar access, Fazio said, but the company’s online platform became increasingly important during the coronavirus pandemic.
The Philly company had grown quickly in the last year, with the gaming industry seeing extra interest during the pandemic. Since 2019, the company’s seen 218% growth in membership, it said, and its Twitch channel grew from 13,000 to 120,000 followers in the past year.
A few months ago, the company announced a subscription service called Nerd Street+ for its Localhost gaming centers and online competition. And last month, the company said it would be partnering with Philly Parks and Recreation on some esports after-school programing, summer programs and online competitions.
Fazio has been clear about the company’s position on affordable access to gaming and online infrastructure in the city, and doubled down with these recent moves, Parks and Rec Commissioner Kathryn Ott Lovell said in a statement last month.
“We share a common goal with Nerd Street Gamers: Level the playing field for kids and families who deserve access to positive recreational opportunities, new technology, and booming industries,” she said.
Singerman has worked with companies like PayPal, SpaceX, Palantir and Airbnb in their early stages through Founders Fund, and found immediate interest in Nerd Street as a gamer himself, he said in a statement.
“I was impressed with John from our first meeting and knew I wanted to help advance his vision of building a robust infrastructure to support gamers of all ages and skill levels,” Singerman said. “Esports are surpassing traditional sports in number of players and audience size, especially among younger demographics, and Nerd Street is in a perfect position to capitalize on that shift.”
This raise, coupled with a $12.5 million Series A in late 2019, led by Five Below, brings the company’s total funding to $25 million. Existing investors including Five Below, Comcast Spectacor, SeventySix Capital, Elevate Capital and angel investor George Miller, all participated in this latest raise.
Fazio told Technical.ly that the company intends to continue fundraising throughout the year, and that a return to some sort of in-person gaming and use of the in-construction HQ could come in Q3 or Q4 of 2021.-30-
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