Esports are still a young industry. As more investors realize the potential of the sector, it will only continue to grow. This was according to Clayton Larcombe who is Chief Investor Officer at PAC Capital – a boutique investor manager that managed the most recent series A4 Financing round of Bayes Esports.
SBC spoke with Larcombe about his vision for the esports industry. He also explained why PAC Capital decided to invest in Bayes Esports. Finally, he discussed the criteria that a company must fulfill before it is considered for investment.
SBC: We are grateful for the opportunity to chat with you! You can start by telling us about yourself, PAC Capital and your plans.
CL I’m Clayton Larcombe and Chief Investment Officer at PAC Capital. After more than a decade of investment banking, I founded PAC a little over three years ago. After many years of experience in Asia, including Sydney and Hong Kong, at big banks like JP Morgan, Morgan Stanley, I decided to make the career change from investment banking to advisory.
I founded PAC with the goal of providing people more options and better access to managing their wealth. This is why I created Australia’s first esports short/long hedge fund, and later launched the retail class for the general public.
It’s about providing everyone with alternative investment options that are rigorously analyzed. PAC Capital currently has more than $500 million under management in multi asset funds, hedge funds, and venture funds PAC Private 1 (PP1) – an exponential growth of $100 million only three years ago.
SBC: Bayes Esports announced recently that its latest capital raising round, which was led by PAC Capital in 2022, had raised EUR9m. Bayes Esports is a company that’s primed to be invested.
CLWhat I see is that esports data is a highly specialized sector within an industry that is rapidly growing. Bayes’ content impact on 80% of the official live esports betting turnover worldwide.
Bayes’ positioning shows great potential for growth. The company also actively engages with industry stakeholders and has formed exclusive partnerships. This strategy will ensure strong growth for Bayes in the future. It also shows the leadership team’s vision, determination and ability to position the company as a key figure in the global esports market.
SBC – What criteria do you think a company must meet before you invest in it?
CLThis is what i call a “moat”, which I believe is the competitive advantage that a company should demonstrate clearly. The moat to me is whether the company can make a significant and lasting impact on the sector through new products or processes.
This innovation should not be difficult for others to duplicate, especially in the gaming industry where larger names still hold monopolistic positions.
This moat is also enhanced by scaling. A company must have a clear vision about its growth potential and a set if executable strategies to support that growth.
SBC: How will this cash injection drive new content partnerships acquisitions and expansions
CLRegarding the previous point, strategic partnerships with key industry players are essential for scaling Bayes Esports up to the next level. Bayes Esports’ success has been marked by a strong presence in the esports industry. This includes the BLAST Premier deal which allows Bayes partners to access live event data and the recent extension of partnership with ESL FACEIT Group. It is a trail that has seen strategic growth and a sign that Bayes Esports will continue to integrate into the deeper aspects.
Bayes Esports will be able to support their efforts to identify, strengthen and continue to establish niche partnerships. They also plan to expand their technological offerings in live data brokerage and integrity monitoring.
SBC – How does this latest investment show PAC Capital’s commitment in the esports sector?
CL:PAC has been and will continue to be committed to esports. Esports has experienced rapid growth and is still in its infancy. As the industry grows and develops, PAC will remain involved in esports.
As Chairman of the Board, my goal is to make Bayes Esports a well-known name in the gaming and electronic sports industry. Bayes Esports should continue to grow steadily and become the data provider that big players rely on. We should be present in every corner of the esports community.
SBC: What potential do you see in the esports industry for 2023, if you take a broad industry view? Do you think this is the sector that could experience exponential growth in the future?
CL The pullback in the wider gaming industry is due to the pull ahead of gaming demand during COVID. We remain confident in the industry’s long-term growth trajectory.
Esports will continue to grow as an industry, which will drive continued growth. Bayes Esports is one example of a partnership with EFG. This collaboration aims to protect the integrity and fairness of the esports market by using Bayes Esports integrity market monitoring and rightsholders protection capabilities. This demonstrates the industry’s self-regulation, which will further legitimize esports and increase its recognition.