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Fantasy sports startup Sleeper closes Series B led by a16z as it expands to esports amid pandemic
Sleeper is widening its ambitions to esports as the arena sports world goes into hibernation amid the COVID-19 pandemic.
While CEO Nan Wang has high hopes that the upcoming NFL season can proceed amid the pandemic, he’s hoping to expand his fantasy sports app’s appeal to gamers by launching support for the intensely popular title League of Legends. Wang says that esports support was always in the cards, but that its rollout was never supposed to come this early.
“Originally, the goal was to do arena sports and then strategically select esports that we thought would be big market opportunities,” Wang says. “In the absence of sports, it becomes easier for us to push something that was further out on the roadmap.”
As Sleeper looks to push beyond its 1 million active users, the company is bulking up on funding reserves. The fantasy sports app has closed a $20 million Series B funding round led by Andreessen Horowitz. Kevin Durant, Baron Davis, JuJu Smith-Schuster and Twitch CEO Kevin Lin are also recent investors. In August, the company shared it had raised a $5.3 million Series A led by General Catalyst.
For now, all of Sleeper’s services are free and there aren’t immediate plans to change that. Wang says that delayed and canceled seasons of arena sports is likely going to push out the company’s timelines for beginning to generate revenues.
Sleeper’s investors have hailed the startup as leading the way among a new class of vertical-focused social networks.
“The next social platforms are going to be vertical and look a lot more like games, offering deeper engagement than broad social networking platforms. Sleeper’s leagues provide shared activities between friends, and has some of the best stickiness metrics we’ve seen,” Andreessen Horowitz GP Andrew Chen said in a statement.
With its League of Legends launch, Sleeper is in the position of helping define a fantasy league experience for a popular franchise. The league’s organization isn’t fundamentally different from other fantasy sports. Users recruit a fantasy crew and draft professional esports athletes to their teams. From there, users in a league participate in weekly head-to-head matches with each other, making predictions and leveraging gameplay-specific mechanics.
League of Legends support is a big deal to Sleeper because it also represents the company’s first international foray. Users in the U.S., Europe, Vietnam, Korea and Brazil can participate in this upcoming fantasy season.
On the product side, the startup recently launched voice chat to capitalize on users stuck at home amid the pandemic. Wang tells TechCrunch the team is also hoping to add video chat to the app soon. Wang also notes that Sleeper is on track to launch three new sports this year.
As Sleeper aims to grow around the roadblocks of pandemic lockdowns, Wang and his team hope that their continued focus on social features can ensure the startup’s shared success in the worlds of online gaming and arena gaming.
“The roadmap for us has always been to win both sports and esports because they both have the same underlying motivation,” Wang says. “The most important thing for any sports fan is being able to enjoy it with their friends and family members.”
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Fantasy football startup Sleeper nabs VC funding to take on ESPN
Sleeper is looking to take on fantasy league apps from major players like ESPN and has amassed venture funding from Silicon Valley investors to take them down.
The Bay Area startup is aiming to treat a fantasy football league more like a social platform than a loose jumble of league mechanics, distinguishing itself as a simple and free, ad-free option.
Sleeper has done limited press as it has been ramping up its app over the past two seasons, but the team has been courting the interest of investors to scale the product, raising more than $7 million from VCs to date. The company closed a $5.3 million Series A late last year led by General Catalyst. In early 2017, the startup also closed a $2 million seed led by Birchmere Ventures with participation from Uber co-founder Garrett Camp’s startup studio, Expa.
There isn’t much in terms of monetization options at the moment. CEO Nan Wang tells TechCrunch that the focus right now is “amassing a large base of users and making it the stickiest and highest engagement product in the category.”
Wang says the app’s users spend 50 minutes per day on average during the season, numbers he calls “Instagram-like.” The main contributor to that number seems to be that chat is always a swipe away and that all of the actions that are happening during the season show up inside chats to encourage engagement.
This unifies the experience for users, many of whom have had to piecemeal their experience by using a WhatsApp or GroupMe group in addition to the other fantasy league apps that they’ve been using. Sleeper’s more differentiated UI seems to be largely popular among early vocal users as well as the up-to-the-minute notifications that deliver league updates.
Poaching users from other platforms is definitely a priority, but Wang says the team has really been looking at how to nab users who have stayed away from the convoluted confusion of fantasy leagues as well. Taking on the leading apps from ESPN, Yahoo and NFL can be daunting; another stress for the younger startup is just how tight the user acquisition window is, though things compound quickly if you can create one loyal user that brings their entire league to the platform.
“The user acquisition window for fantasy football leagues is strongest from the second week of August until the first week of September. Historically, we’ve seen that about 70% of users create their leagues in that three-week window,” Wang tells me.
The funding has been used to build out its team, which is still just 10 full-time employees, as well as expand their ambitions beyond fantasy football alone into other sports, including basketball and soccer.
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