Recently we reported that Telstra, Australia’s largest ISP, had made an investment in esports – through an American esports team, Team SoloMid (TSM). I chased the company up for further comment, and one of the principals of Telstra Ventures – the ISP’s venture capital firm responsible for investing in TSM.
Yash Patel is a principal at Telstra Ventures. Patel helped source the investment in TSM, as well as the mobile-focused esports startup Skillz last year, and as a result he was the best person to speak to Telstra’s interest in the area.
Following the news of Telstra’s investment, I wanted to know: why TSM, instead of an Australian organisation; how long had Telstra Ventures been looking at the deal; and what was the appeal of investing in esports. Patel couldn’t answer all of my questions – unsurprisingly, corporate investors are not as open as, say, a game developer – but he did provide some perspective.
“We have studied the growth of the esports market over the past few years and were attracted to TSM’s passionate fan base and sustained culture of success in popular games such as League of Legends,” Patel said over email.
“TSM is an attractive investment for us in that it combines the growth in digital eyeballs typically associated with venture-backed consumer start-ups with the scarcity value from professional sports team ownership. We have evaluated many companies in the esports ecosystem over the years, including Skillz (operates in the mobile esports space) which we invested in last year.”
Patel wouldn’t say how long Telstra Ventures had looked at the deal, but he indicated that “we believe our investment in TSM will help seed the growing Australian esports ecosystem”. “Having a strategic investment relationship with the most popular esports team in the world will help with plans for Australia and global growth,” he added.
In a separate response to Sponsorship News (free account required), Patel noted that Telstra was looking at more esports investments beyond TSM and Skillz.
Patel also expected mobile esports to “grow significantly” in the coming years, noting that the mobile gaming market has exponentially outpaced the growth of console and PC games since the release of the iPhone. “We expect the mobile esports market to grow significantly as the infrastructure and publisher ecosystem for mobile esports matures across all types of mobile games (casual, sports, fighting etc),” he said.