Bitkraft Gaming and Esports VC on Market Trends and His Investments - Josh Loe

Bitkraft Gaming and Esports VC on Market Trends and His Investments

  • Jens Hilgers is the cofounder and former CEO of ESL and cofounder and chairman of G2 Esports.
  • He started Bitkraft in 2016, which invests in early-stage startups in esports and gaming.
  • Hilgers broke down the qualities he looks for in founders and categories in which Bitkraft invests.
  • See more stories on Insider’s business page.

Jens Hilgers has been at the center of the esports and gaming world as it has grown into a prominent industry.

Hilgers is the cofounder and former CEO of ESL, one of the world’s largest tournament organizers and production companies, and the cofounder and chairman of G2 Esports, a professional team with rosters in eight different titles.

In 2016, he started Bitkraft, a venture capital fund with a focus on early-stage startups in gaming, esports, and interactive entertainment. The fund currently has over $420 million in assets invested across 43 different companies including

Epic Games
; Roundhill Investments; and Venn, a gaming content network that launched last year.

With Bitkraft, Hilgers focuses on investing in four main categories in and around the industry, which he thinks represent the biggest market opportunities, he told Insider.

Here they are:

  • Intellectual property: Bitkraft invests in the IP games and publishers that emerge across genres including mobile and augmented/virtual reality. One example in Bitkraft’s portfolio is Tilt Five, which develops augmented reality tabletop gaming.
  • Platforms: One platform Bitkraft is invested in is, which aims to integrate non-intrusive ads into regular gameplay. Hilgers said that platforms can be tailored both to businesses and to consumers. 
  • Applied game mechanics: Companies can apply the best practices from gaming companies and apply them to other consumer-based products in a different industry. Hilgers said that the rewards system in gaming can be applied to learning languages.
  • Horizontal technology: Bitkraft also invests in technology with simultaneous applications in the gaming industry and outside of it. He cited Epic Games’ Unreal Engine, which he believes has applications in architecture and film production, as an example of horizontal technology. Although Bitkraft is invested in Epic Games, it acquired its shares on the secondary market, rather than through its traditional seed-stage investment. “This is something that wouldn’t sit at the center of our investment strategy due to their stage, but since it is so central to the ecosystem, we decided to pursue a small investment,” he said.

As a fund that focuses on seed-stage companies, Hilgers said that understanding founders is crucial.

“Ideally, the founders have street smarts and can come up with great solutions even in tough situations,” he said. “In my experience, the strongest founders are methodical; they can quantify an issue and create a strategy that can be measured in its execution.”

When asked if there were any trends in the gaming industry that he was skeptical of, Hilgers said he was surprised that he often receives pitches for ideas that have failed in the past. He cited tournament-hosting platforms and cash-based tournaments where users wager money on their matches as two examples.

“Often the pitches lack the necessary market research and don’t reference the previous failures and why this time is different,” he said.

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