World champion Magnus Carlsen’s fantasy chess startup raises $3 million

Norway-based Fantasy Chess has received pre-funding and not using a product from investors SNÖ Ventures, Coatue and funds led by billionaires Yuri Milner and Peter Thiel.

Last yr, after five titles, Magnus Carlsen decided to not defend his World Chess Champion title for one easy reason: he didn’t enjoy it. “I just feel like I don’t have much to gain,” he said. explained in his podcast. Instead, in the identical month that two other grandmasters were battling for the crown in April, Carlsen tried something recent: He brought fantasy sports to the old game.

Now the project he launched, Fantasy Chess, goes from experiment to venture-backed startup. Led by CEO Mats André Kristiansen, the previous co-founder of an internet grocery startup, Oslo-based Fantasy Chess has raised $3 million in initial pre-funding, led by local enterprise capital firm SNÖ Ventures and Coatue, together with billionaire Yuri Milner’s Breakthrough Initiatives and Peter Thiel’s fund Thiel Capital.

After testing a fantasy game in a tournament with Norway Chess last May, Fantasy Chess now hopes to expand the board beyond that genre as well. In that game, fans typically select players to form a team and receive points based on their performance in real games. (In this case, participants selected pieces of specific competitors to follow. They won points once they beat other pieces and lost points once they were taken away from them.)

“We’re trying to do more than just develop a fantasy game, which was the original idea,” he said, shortly after Forbes‘ Venture Capital Reporter in 30 Rapid Chess Moves. “Now it’s more about creating new content for chess and presenting it better.”

Fantasy Chess still plans to launch multiple fantasy games, Kristiansen said in a separate interview. But the corporate also desires to win over current fans – and get more excited concerning the game – by producing its own content and offering more streaming opportunities for elite players in real-world tournaments. It could also host its own tournaments and events, the CEO added: “When Magnus and the other top players in the world play chess, we want more people to get excited about it.”

All of those opportunities are one other indication that Fantasy Chess is a newcomer even for a startup. It hasn’t launched an official product yet and employs just six people. But it’s seeking to capitalize on a significant chess moment in popular culture, from the Netflix series The Queen’s Gambit to the rise of popular streamers like U.S. grandmaster Hikaru Nakamura, who has 1.9 million followers on the streaming service Twitch.

It can also be notable since it has a co-founder that no other chess startup can currently boast: Carlsen. When a newcomer can take the market by storm, it actually helps to have the world’s best chess player of all time, who some consider to be the very best player of all time, on board. “I think it would have been a hugely more difficult company to start with Magnus,” Kristiansen admitted. “I wouldn’t have joined without him on the team.”

Carlsen’s interest in fantasy sports began about 10 years ago, he said, when he and a bunch of friends were avid fans of the American fantasy football sitcom “The League.” Inspired by the show’s antics, they began a league in one other sort of fantasy football, the English Premier League. Carlsen also dabbled in fantasy basketball, but he excelled in fantasy football (English soccer), where he briefly reached No. 1 on this planet rankings in December 2019. Around the identical time he became interested by fantasy, Carlsen had also founded a mobile gaming company, Play Magnus AS, to develop a chess app that might let players compete against software modeled on Carlsen’s skills at different ages. Launched in 2014, the app and the corporate behind it were acquired by Chess.com in 2022 for about $80 million, with Carlsen also acquiring shares within the leading chess site.

So Carlsen was a free-agent fantasy enthusiast in 2023 when Ding Liren defeated Ian Nepomniachtchi. He teamed up with Norway Chess and a startup studio called Iterate to create an organization called Pawn, which focused on fantasy chess. announced before his app experiment on the Norway Chess spring tournament that very same yr.

Shortly after that attempt, Carlsen and his team decided to formalize Pawn as a more traditional startup and lift external funding. Pawn became Fantasy Chess, with an updated capitalization table (Norway Chess and Iterate remain investors) and an experienced tech CEO. Kristiansen was a month into his year-long sabbatical after his food startup Oda merged with a Swedish rival after losing the billion-dollar valuation he achieved while drinking coffee with Carlsen’s former manager in 2021. He quickly ended his work break.

“I really wanted to develop another product,” Kristiansen said. “And I felt that in the worst case scenario, I would meet Magnus and get a taste of the chess world. In the best case scenario, we would develop the next big thing in chess.”

Expert-level chess knowledge will not be required to work for or put money into Fantasy Chess, the CEO said. SNÖ Ventures joined as an area firm with experience in gaming startups; Carlsen knew Milner personally through his participation in his foundation and science awards “Breakthrough”. At the awards ceremony in Los Angeles, he met Coatue and Thiel, an experienced player who was the boss of one in every of the Norwegian firm’s partners.

Currently, investors are betting mainly on Carlsen and Kristiansen, said Magne Uppman, partner at SNÖ Ventures. “We look for teams and founders with unfair advantages, and with their combined backgrounds, this is such an unfair advantage,” said Uppman.

Of course, and not using a product, Fantasy Chess has no revenue. Such necessary details will work themselves out, investors argue, as the corporate finds its streaming area of interest. “Fantasy Chess is different from other chess ideas we’ve seen so far because it offers fans a way to connect with the best players,” Coatue’s Ben Schwerin added in an emailed statement.

Currently, Fantasy Chess is ways to monetize through promoting, Kristiansen said. While it could charge for premium stats and insights, the startup intends to maintain its games free to play. Betting – an increasingly popular method to monetize fantasy interest within the U.S. – can also be not a priority, he added. (There is already a betting marketplace for chess in Europe, and Carlsen was sponsored by one such company for some time.)

Kristiansen and Carlsen also consider that other top players and content creators like Nakamura will wish to use Fantasy Chess to succeed in a bigger audience. “We’ve already had top players test the game and were excited to participate. Even top players want more content around chess broadcasts.”

With Carlsen expected to defend his titles on the FIDE World Rapid and Blitz Championships next December, Fantasy Chess is under pressure to launch a product in time to capitalize.

Then there may be a recent announced Film project a couple of chess scandal involving Carlsen that would soon cause much more of a stir. (Carlsen abruptly left a tournament in 2022 after a surprise loss to an adolescent, then resigned after one move of their next encounter, fueling rumors that his opponent was cheating.)

Carlsen quickly joked that he had “no idea” who would play him on screen.[Chess] Since it’s a part of the zeitgeist, it’s good,” he added. “In general, I welcome most of what is happening without delay.”