E-sports are becoming big business. How big? Big enough that San Francisco-based live streaming startup Twitch (formerly TwitchTV) has about 20 million gamers watching e-sports on its platform. And so big that Twitch is raising another $15 million to capture this large — and growing — opportunity.
Twitch launched only about a year ago, but it’s quickly grown to become pretty huge as a platform for streaming and watching live matchups of video games. Borne out of Justin.tv’s live streaming business as a new site focused on the e-sports vertical, Twitch has already become the driving force behind the company’s business.
While Justin.tv remains up and running, Twitch is where the team is making most of its money. That’s due to partnerships that Twitch has struck with multiple game publishers and e-sports leagues, as well as a deal that it did with CBS Interactive to sell Twitch’s video ad inventory. In addition to ads, Twitch also has a growing pay-per-view business for live events, as well as a subscription model that is also available for streaming partners to take advantage of.
Rapidly growing, it was time for Twitch to take on more capital. The company raised $15 million in a round led by Bessemer Venture Partners, with Alsop Louie Partners and Draper Associates also participating. The Series B round is the first money that Twitch has raised since it brought on $8 million back in its Justin.tv days.
A lot’s changed since then — in addition to Justin.tv pivoting toward the e-sports market, Justin.tv CEO Michael Seibel spun out the company’s on-demand mobile video app Socialcam and later sold it to Autodesk. And Justin.tv founder Justin Kan left to create his own startup, Exec, earlier this year. All of that has happened in just the last 12 months.
The new funding will be used to build out Twitch’s engineering team, to meet demand for Twitch live streaming on a growing number of devices and game consoles. Twitch doesn’t just want to make it easier for gamers to stream their e-sports matchups to viewers, with one-click access that it’s added to certain games in partnership with publishers. To do so, Twitch VP of marketing Matt DiPietro said the company will significantly increase headcount from its current 60 employees.
With more engineering talent, an SDK that will let gamers broadcast and tune in to games directly from their game consoles, and a growing number of viewers tuning in to its live streams, the future looks really good for Twitch. That’s especially true considering that it’s got a huge head start as the leading platform for live streaming this type of content to viewers.