Magnus Carlsen's Fantasy Chess Game: From Experiment to Venture-Backed Startup

Fantasy Chess, a project conceived by chess legend Magnus Carlsen, is evolving from a mere experiment to a venture-backed startup. The brainchild of Carlsen and spearheaded by CEO Mats André Kristiansen, Fantasy Chess has secured $3 million in pre-seed funding from a consortium of investors, including SNÖ Ventures, Coatue, and funds associated with billionaires Yuri Milner and Peter Thiel. This funding follows a trial run of a fantasy game at the Norway Chess tournament in May 2023.

• The initial idea was to create a fantasy game akin to traditional fantasy sports, where players select chess pieces to form a team and earn points based on their performance in real matches. The game's initial offering involved choosing specific competitors' pieces and accumulating points through piece captures and avoiding losses.

Expanding Beyond Fantasy: A Vision for New Content and Engagement

The vision for Fantasy Chess extends beyond a basic fantasy game. The startup aims to become a platform for creating new content and presenting chess in a more engaging manner. Their goal is to attract existing chess enthusiasts and entice newcomers by generating original content and improving streaming accessibility for elite players during real-world tournaments.

• Fantasy Chess intends to produce its own tournaments and events, aiming to heighten excitement around top-level chess matches featuring players like Carlsen. This strategy leverages the popularity of chess in popular culture, fueled by Netflix's "The Queen's Gambit" and the rising popularity of chess streamers like Hikaru Nakamura.
• The venture's cofounder, Carlsen, is considered the world's highest-ranked chess player and is viewed by some as the greatest player of all time. His involvement is a significant asset, making it difficult for other chess startups to compete.

Funding and Investment: A Bet on Team and Vision

The decision to invest in Fantasy Chess reflects a strong belief in the team and its vision. The company's unique selling proposition lies in its ability to engage fans with the top players in a unique way. The investors are confident in Carlsen and Kristiansen's ability to leverage their combined experience and expertise.

• SNÖ Ventures, a local firm with expertise in gaming startups, was attracted to Fantasy Chess due to the team's "unfair advantage" – Carlsen's unparalleled chess prowess and Kristiansen's experience in the tech sector.
• Carlsen's personal relationship with Yuri Milner, a prominent investor in technology and science, through the Breakthrough Foundation, facilitated investment from Milner's Breakthrough Initiatives fund. Additionally, Carlsen's acquaintance with Peter Thiel, a skilled chess player and former boss of a partner at SNÖ Ventures, resulted in investment from Thiel Capital.

Monetization Strategy and Future Plans

Despite lacking a product yet, Fantasy Chess plans to generate revenue through a blend of advertising and premium services. The games will remain free-to-play, while premium features like in-depth statistics and insights will be available for a fee. The venture is not prioritizing betting, although a chess betting market already exists in Europe, and Carlsen has previously been sponsored by a betting company.

• The company anticipates attracting other elite players and content creators, like Hikaru Nakamura, who are seeking larger audiences. The game's platform has already received positive feedback from top players, suggesting a strong potential to attract a broader chess community.
• With Carlsen set to defend his titles in the FIDE World Rapid and Blitz Championships in December, Fantasy Chess is under pressure to launch a product that capitalizes on this event.
• A recently announced film project based on a chess scandal involving Carlsen, which could drive more attention to the game, adds further potential for success.