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

Norway-based Fantasy Chess raised pre-seed funding without a product from investors SNÖ Ventures, Coatue and funds led by billionaires Yuri Milner and Peter Thiel.

Last year, Magnus Carlsen gave up on defending his five-time world chess championship for the simple reason that it just wasn’t fun. “I just didn’t think there was much to gain from it,” he explained on a podcast. Instead, in April, the same month that two other grandmasters faced off for the crown, Carlsen tried something new: he infused the ancient game with fantasy sports.

Now, his project, Fantasy Chess, is evolving from experiment to venture-backed startup. Oslo-based Fantasy Chess, led by CEO Mads Andre Christiansen, a former co-founder of an online grocery startup, has raised $3 million in its first pre-seed round led by local venture capital firms SNÖ Ventures and Coatue, with participation from billionaire investor Yuri Milner’s Breakthrough Initiatives and Peter Thiel’s fund Thiel Capital.

After testing out fantasy games with Norwegian Chess in a tournament last May, Fantasy Chess now wants to expand the board beyond the genre, where fans typically select players to form teams and earn points based on their performance in real matches (in this example, participants select and follow specific competitors’ pieces, gaining points for capturing other pieces and losing points for being removed).

“We’re trying to do more than just the original idea of ​​making a fantasy game,” he said, moments after the polite criticism. Forbes“A VC reporter talks about 30 speed chess moves. Now the idea of ​​creating new content about chess and presenting it in a better way is becoming mainstream.”

Fantasy Chess plans to release several fantasy-style games, Christiansen said in a separate interview. But the company also aims to build on current fans’ following and generate more interest in the game by producing its own content and offering streaming capabilities to elite players in real-world tournaments. It could also produce its own tournaments and events, the CEO added. “We want more people to get excited whenever Magnus or one of the top players in the world is playing chess.”

All of these possibilities mean that Fantasy Chess is still new to the startup world—it hasn’t released an official product and has just six employees—but the company is trying to capitalize on chess’ bright moment in pop culture, from Netflix’s “The Queen’s Gambit” show to the rise of popular streamers like Hikaru Nakamura, a US grandmaster who boasts 1.9 million followers on the viewing service Twitch.

Also notable is the presence of a co-founder in Carlsen, something no other chess startup can boast at the moment. If the newcomer can make an impact on the market, having the world’s highest-ranked chess player, arguably the greatest of all time, on board will certainly be a plus. “I think doing this company with Magnus would have been much more difficult,” Christiansen admitted. “I wouldn’t have joined without him on the team.”

Carlsen said he became interested in fantasy sports about 10 years ago when he and his friends were big fans of the American fantasy football sitcom “The League.” Inspired by the show’s commotion, they started a league for another kind of fantasy football: the English Premier League. Carlsen also tried his hand at fantasy basketball, but it was fantasy (English) football that made him a star, briefly reaching No. 1 in the world in a December 2019 contest. Around the same time he started to get into fantasy, Carlsen also founded a mobile gaming company, Play Magnus AS, developing a chess app that allowed players to play against software modeled after Carlsen at different ages and skill levels. The app and company, released in 2014, were acquired by Chess.com in 2022 for approximately $80 million, giving Carlsen a stake in the major chess site.

In 2023, when Ding Liren beat Ian Nepomniachtchi, Carlsen was a free-agent fantasy enthusiast who partnered with Norwegian Chess and startup studio Iterate to launch a fantasy chess-focused business called Pawn, announcing it ahead of an app experiment at Norwegian Chess’ spring tournament that year.

Shortly after the trial, Carlsen and his team decided to formalize Pawn as a more traditional startup and raise outside funding. Pawn became Fantasy Chess with a revamped cap table (Norwegian Chess and Iterate continued to invest) and a tech veteran CEO. Christiansen was a month into a year-long hiatus from his grocery startup Ouda, which merged with a Swedish rival after losing the $1 billion valuation it had reached in 2021, when he had coffee with Carlsen’s former manager. He quickly cut his work hiatus short.

“Creating a new product was something I really wanted to do,” Christiansen said, “and I felt like, worst case scenario, I’d get to know Magnus and get a taste of the world of chess. Best case scenario, I’d end up creating the next great thing in chess.”

You didn’t need expert-level chess skills to work or invest in fantasy chess, the company’s CEO said. SNÖ Ventures participated as a local firm with expertise in gaming startups. Carlsen knew Milner personally through Milner’s involvement with the Breakthrough Foundation and science prizes. During a visit to Los Angeles for the awards, Carlsen met Kotsch and Thiel, a former boss of one of the Norwegian firm’s partners and an accomplished chess player.

Magne Upmann, a partner at SNÖ Ventures, said investors are betting primarily on Carlsen and Christiansen for now. “We look for teams and founders with an unfair advantage, and with their combined résumés this is definitely an unfair advantage,” Upmann said.

Of course, without a product, Fantasy Chess can’t make money, and investors argue that those key details will work themselves out as the streaming niche establishes itself. “Fantasy Chess is different from other chess-related ideas we’ve seen before because we’re building a way for fans to engage with the best players,” Coatue’s Ben Schwerin said in an emailed statement.

For now, Christiansen said Fantasy Chess is exploring ways to make money through advertising, and that it might charge for premium statistics and insights, but intends to keep the game free to play. He added that betting, an increasingly popular way to cash in on interest in fantasy in the U.S., is also not a priority. (Chess betting markets already exist in Europe, and Carlsen was sponsored by such companies at one time.)

Christiansen and Carlsen also believe that other top players and content creators like Nakamura will also be looking to use fantasy chess to reach a larger audience. “We’ve already had top players testing out the game and getting excited about getting involved. For top players, having more content around chess broadcasts is something they’d like to see.”

Carlsen is expected to defend his title at the FIDE World Rapid & Blitz Championships this December, putting the pressure on Fantasy Chess to launch its product in time to turn a profit.

Plus, there’s also a recently announced film project about a Carlsen-related chess scandal that could lead to more talk in the near future. (Carlsen abruptly withdrew from the tournament after a surprise loss to a teenager in 2022, then bowed out one move into his next match, sparking rumors that his opponent was cheating.)

Karlsen joked that he had “no idea” who would play him in the film.[Chess] “It’s a good thing because it’s part of the zeitgeist,” he added. “I generally welcome most of what’s going on right now.”