Any venture capital handbook will tell you that the most promising venture bets are those where an excellent founder tackles a sharply growing opportunity, also known in VC jargon as “a rising tide raises all the boats”. The hard part for any investor is to actually spot such a bet. The story of our Vitosha investment into Augment may very well be a story just about that.
As my own gaming days ended pretty much in my teenage years, when I hear about gaming from an investment perspective, there is usually very little emotion on my side. We all know how notoriously hard it is to predict the success of a game title; even hugely successful gaming studios regularly produce market flops, and often a sequel to a successful game fails to get even close to its predecessor’s numbers.
Next to gaming proper, over the past years we’ve all witnessed the phenomenon of esports, but apart from streaming products in the media verticals, I never realized the vast potential of the market, and the incredible opportunities that are still to be realized there. That all changed after our team first met Tim Petrov late last year.
Tim’s story of how he ended up building Augment is one of the best founder stories I’ve come across in years, mentoring hundreds of founders and reviewing hundreds of investment opportunities in our Vitosha pipeline.
Born in Varna, Bulgaria, Tim spent his teenage years, in his own words, “gaming and playing football, and doing almost nothing else”. He became so competitive in games like Dota and Counter-Strike, that he’d spend entire nights analyzing strategies and other players’ achievements, with the single goal of making it the top 5% in each game. As Tim says, “once I’d make it to the top 5%, I’d usually lose the competitive interest and take on another game”.
The other thing Tim did when he wasn’t gaming, was football, where he was a goalie in a local competitive junior team. That was when it first started dawning on Tim that while competitive sports and competitive gaming have so much in common, there is a huge gap between the way players are trained in traditional sports and in esports. Where the former has academies, individual trainers, scouts, and entire industry to spot and support talent, in esports there still are virtually no tools for the budding business of training up-and-coming talent.
The esports vertical is no joke. Most likely you’ve seen images of 50,000 seat stadiums filled to the rim with spectators, watching two opposing teams on stage play a video game that is beamed on huge screens in all four directions. Spectatorship of competitive matches is projected to double from 300 million in 2018 to 600 million by 2023, and with the Covid pandemic still holding the world in its grip, esports are starting to take over traditional sports. Especially in the millennial demographic, viewership of traditional sports is stagnant, while esports matches of the most popular games are already on the same ratings level as NBA, NFL, or Grand Slam tennis tournaments.
With Augment, Tim and his team are building a match analytics and improvement platform that allows competitive players to analyze matches, rewind and recreate the gameplay, and empowers players to understand which elements of the game they can improve on. Based on game APIs and AI algorithms that analyze video footage, they track and systematically order key gameplay elements for analysis and player improvement.
Tim traveled a long and winding road before setting out on Augment. With his sports and competitive gaming background from his teenage years, he embarked on a journey with several startups during his university years, at some point running business development in Asia for a large currency exchange. At the same time, with a few friends in Bulgaria, they decided to start the first esports academy for local talent, with the idea of building teams and coaching them to success.
As Tim says, this is where they realized two things: first, that the academy business is not very scalable, which with the hypergrowth of the global esports sector is especially poignant, and second that there is a lot of data in esports that either goes unused or is inaccessible to coaches in a convenient way.
With Augment, the team wants to expand and seize the esports training market on these very elements: build a tool for coaches of competitive players and their teams, and unlock gameplay data that will allow them to take actionable data-driven decisions. Augment first started as an idea for Counter-Strike players, pivoting to Valorant when that was released last year.
Currently Augment is in a closed beta with a limited number of top players and coaches, and in the following months we’re expecting the team to take the beta public, and start a business development cycle aimed at partnerships with institutions and corporations.
As Tim likes to say, the opportunity is huge and the time is now. Following an already established tradition of successful gaming and edtech startups operating out of Bulgaria, we at Vitosha are excited about Augment’s upcoming launch later this year, and are looking forward to making a dent with Tim and his team in the way esports competitive players reach those top 5% that inspired Tim from the very beginning.