Blue Star Capital PLC (LON:BLU) has expanded its interest in the esports sector with a new investment in FORMATION Esports, a firm with a focus on esports opportunities within contact sports.
The firm said it has invested €125,000 (£115,500) in a subscription for 12.5mln new shares in Formation, providing the investment group with a 9.6% stake in the company, which is incorporated in France with the support of the UNIQORN incubator-accelerator.
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Blue Star said the fundraising will provide Formation with cash to launch a dedicated esports platform aimed at providing contact sports clubs with revenue and sponsorship generating opportunities and increased exposure.
The investment group also said the board of Formation estimated that contact sports, notably rugby, have a global fan base of over 3 billon, although they have received “little attention” from the esports sector.
As a result, Formation intends to “cover the entire spectrum of contact sports fans and clubs” and expects to launch its own academy with physical workshops across France and Europe.
Blue Star noted that Formation is also in the process of finalising a relationship with Betway Africa's virtual sports platform and has built a platform to engage and convert those customers.
"We are pleased to invest in FORMATION esports, which continues our investment focus on esports. As with our other esports investments, we have managed to secure a sizeable stake in an early stage business where we see considerable potential. Our existing portfolio continues to make strong progress and we look forward to updating the market with further news as the year progresses", Blue Star chief executive Tony Fabrizi said in a statement.
The new investment in Formation follows similar investments in the sector in companies such as Guild Esports, which is aiming to float on the London Stock Exchange later this year.
Shares in Blue Star rose 1.2% to 0.21p in early deals on Wednesday.