What's better than having Shark Tank's Mark Cuban backing your startup? How about landing Ashton Kutcher as an investor?
That's exactly what happened to e-sports company Unikrn (pronounced "unicorn") Tuesday. One of the startup's existing investors reduced their stake in the company so that Kutcher's Sound Ventures could buy into the Series A round that closed in June. Unikrn did not disclose the name of the investor or firm with the reduced stake, but existing backers include 500 Startups, Advancit Capital, Freelands Group, Indicator Ventures, and Australia-based Tabcorp, one of the world's largest publicly-listed gaming companies.
"We made room because Ashton has an impressive history of spotting really great consumer brands, from Airbnb to Uber," says Unikrn founder Rahul Sood. Unikrn's total funding to date remains at $10 million. The company has fewer than 50 employees.
Founded in November after Sood stepped down as general manager at Microsoft Ventures, Seattle-based Unikrn is trying to establish itself in the e-sports business, in which large groups of people team up in competitive video-game playing.
Unikrn is focusing on a new dimension for e-sports: letting consumers bet real money on the outcomes of these video game competitions. One of the ways the company makes money today is through its betting arm (if you lose your bet, you lose your money and it goes to the company). It also generates revenue from its roughly 10 million users through ads on its site, according to Sood.
“Unikrn stood out because they are completely changing how people engage with e-sports,” Kutcher said in a statement.
Americans can't do any real betting for now, as Unikrn takes bets only from people living in countries where betting on e-sports is legal, including the United Kingdom, Australia, and Ireland. Betting in markets where it is legal is free.
On Tuesday, however, the company launched a virtual currency called Unikoin that users can bet with and use to buy products from computer companies like Alienware and device accessory companies like Logitech. The currency is free, but users have to earn it by doing things like playing trivia games and interacting with Unikrn on social media. The company is also soon to release a mobile app called Unikrn Vault that lets users manage their Unikoin accounts.
While referring to video game playing as "sports" might sound like a stretch, e-sports are already being recognized by U.S. universities, some of which are awarding athletic scholarships to students based on their video-game skills. Last year, Chicago-based Robert Morris University, a private, accredited university, gave a $15,000 athletic scholarship to a computer networking student for his video game skills.
Though Unikrn just closed its Series A round in June, Sood says the company is already being approached by its investors about participating in its next funding round.
"We have no interest in raising another round yet, but it seems to me that there's so much interest that we may have to," he says.