Cloud9 has raised $25 million in Series A financing from notable companies and parties in sports, media, tech and entertainment, Cloud9 said.
New contributors to the company include the WWE, the Beverly Hills Sports Council, Monumental Sports & Entertainment co-owner Raul Fernandez, Creative Artists Agency co-founder Michael Ovitz, venture capital firm Founders Fund and a joint investment from tech investors David Sacks and Bill Lee.
Series A funding is the first round of significant venture capital financing. This round of funding started in September and closed on Friday.
"We just looked around the space, looked at all the players and did our own evaluation of who we thought would be successful in the long term," WWE chief strategy and financial officer George Barrios told ESPN. "We just thought that the Cloud9 team had developed lots of expertise and we're just really, really impressed with Jack [Etienne, the Cloud9 CEO] and the rest of the staff; how professional they were, how organized and how much infrastructure they had built for a small organization. We thought they were on their way. We looked at a lot of players, and they were the ones we put in the top tier."
Several investors from the company's $3 million seed round in January have also increased their stake, the esports organization told ESPN. San Francisco Giants outfielder Hunter Pence participated in the Series A financing and will become a board observer who can sit in on meetings. Others who upped their ownership include video game development company FunPlus, Signia Venture Partners' Rick Thompson, Reddit co-founder Alexis Ohanian and Lee.
The Series A financing was led by Founders Fund, which is operated by several founders of PayPal and was one of the first investors in Facebook and the first institutional investor in SpaceX. Founders Fund partner Brian Singerman also invested in Cloud9's seed round and oversaw this raise. Singerman will also occupy a seat on the company's board.
The organization sought additional funding to help offset franchise fees that could total $30 million, as Cloud9 recently acquired the London spot in the Overwatch League and reportedly was awarded a place in the newly franchised League of Legends Championship Series, continuing its presence in the league that began in 2013.
"We didn't really bring too much money into the company in [the seed] because we didn't know what the franchise and entry fees were going to be," Etienne told ESPN. "We didn't know for sure which games we'd be a part of. It was a bit premature to have the sizable round that we ended up doing this time. It was always in the plan, even when we did our seed, we knew this was coming and the timing was going to be around when we knew what the franchising costs would be depending on what we were looking at. That's what brought this on."
Etienne also said that he hopes to build a facility for Cloud9 and its players in Los Angeles but did not go into detail. One of the company's peers, Team Liquid, announced in August that it would do the same for its League of Legends and Counter-Strike: Global Offensive teams, as well as its other enterprises.
Cloud9 currently has holdings in eight esports titles. The organization was formed with the acquisition of a League of Legends team in summer of 2013 by former Team SoloMid vice president Etienne and his wife, Paullie. It has since expanded into Counter-Strike, Overwatch, Hearthstone, Super Smash Bros., Rocket League, PlayerUnknown's Battlegrounds and Vainglory.