The phenomenon of "esports", aka electronic sports involving video games and other channels, is expanding rapidly.

Artist Capital Management, has raised $100 million for its first fund, one that concentrates on electronic sports games, a potentially multi-billion dollar sector.

The Artist Esports Edge Fund gives “concentrated exposure to leading esports companies”, the investment firm said yesterday in a statement. 

The firm describes esports as a “groundbreaking secular growth theme”, with an estimated 380 million unique viewers in 2018, it said (source: Newzoo, Esports Market Report), and a young audience, with 79 per cent of viewers aged 35 years or under. Esports revenues stood at $900 million last year and could catch up with traditional sports leagues

Artist Capital Management said another driver is that franchised esports leagues are being built and that’s a “key inflection point” for the industry. Examples include Activision's Overwatch League or Riot Games' League of Legends North American Championship Series.

"Similar to the evolution of other internet verticals, we expect that a small number of esports companies will eventually win the lion's share of industry revenue and market capitalization" Josh Dienstag, Artist Capital Management's chief investment officer, said.

The Edge Fund's investments include 100 Thieves, the Los Angeles-based lifestyle brand and esports organization, Washington Esports Ventures, the owner of the Washington Justice team in the Overwatch League, and chatting and viewing apps in the ecosystem.

The fund can invest across stages and in both primary and secondary securities. In July of 2019, the Edge Fund led 100 Thieves' $35 million Series B, and Josh Dienstag joined 100 Thieves' board of directors. 

Artist Capital Management also raised $35 million of incremental capital from its limited partners in separate, co-investment vehicles. Those funds were all deployed in 2019 to give further support to Edge Fund portfolio companies.