The Team Heretics project was born in August 2016 and immediately faced considerable challenges and marked operational difficulties. And for good reason: the three founders, aged just 16, 17 and 23, began their adventure with meagre start-up capital of €3,000 and two sponsors. At the time, it seemed impossible to compete with the giants of the industry in Europe: Fnatic, G2 Esports, Origen and Vitality. Far from claiming to reverse the hierarchy overnight, the Spanish club's first objectives were to maintain steady growth and not have to correct any operating deficits.

With two content creators at the helm - David "TheGrefg" Cánovas Martinez and Jorge "Goorgo" Orejudo - Team Heretics is naturally rooted in esports entertainment. The team therefore has a strong connection with the gaming public and is building a solid network around this theme to enable their project to grow and stabilise. And once again, without rushing things, as explain two of club’s co-founder, Antonio Catena (CEO) and Arnau Vidal (CGO) : "Our EBITDA represents around 10% of our sales every year. However, our aim is not to maximise our profitability in the short term, but to ensure the sustainability of the company. Since our creation in 2016, our business has been sustainable every year, demonstrating the viability of our business model."

Maintaining control

This very gradual growth model requires careful management and a balance between investment and results. “The protection of our shareholders and partners is essential. We maintain our cash flow of at least €1 million each year so that we can continue to operate, while avoiding the need to raise funds urgently in the event of unforeseen circumstances. We only raise funds for asset acquisitions or strategic investments like the LEC slot, but never for operational expenses.” Heretics had therefore raised funds to acquire the slot from Misfits Gaming in 2022. This strategic choice is designed to protect the economic interests of the club's stakeholders (particularly investors) by focusing investment on concrete assets such as slots in closed leagues.

By refusing to rely on fundraising to cover operating costs or to refinance their growth, the club has ensured that their vision is sustainable and, above all, that they maintain control of the organisation. To date, the three historical shareholders have retained the majority of shares and decision-making powers. This strategic choice strengthens their resilience and the club's ability to endure unforeseen events without compromising their financial health. The directors explain: "We believe that the mistakes made by companies in the sector are that they have tried to move too fast, and that the problem lies not with the industry itself but with the business approach of the companies. If our growth has to be slower, that's fine, as long as we maintain a healthy financial balance."

In the big league

On paper, this responsible vision could have an impact on the club's sporting ambitions. And yet, while Heretics is still looking to achieve a major success in the LEC, the team already has some impressive achievements to their name. When they arrived on League of Legends in 2017, TH won the Spanish second division, notably by launching the career of a certain Ivan "Razork" Martin, now considered one of the best junglers in Europe. Later, just before moving up to the LEC, Heretics won the EU Masters.

On VALORANT, Heretics earned their spot in the VCT EMEA in 2023 and, after a generally unsuccessful season, managed an excellent 2024 season. Despite the lack of titles, the Spanish club reached the finals of the EMEA Kick-Off, of Stage 1 of the VCT EMEA, of the Masters: Shanghai and of the Champions. A curse in the finals, but that should not totally obscure an exceptional year in sporting terms.

The club also benefited greatly from their arrival in the LEC and then in the VCT EMEA in business point of view. The club aims to achieve sales of €3 million in 2021, then €5 million in 2022, before taking a big leap to €11 million in 2023. "We're aiming for continued growth, with the ultimate goal of exceeding €30 million in revenues, explain the directors. We are constantly innovating to discover new sources of revenue while maintaining a solid financial foundation. With around 70 employees (excluding players, coaches and content creators), we are in a strong position compared to most European organisations."

Continuous innovation

Despite this growth, capturing and keeping the public's attention remains a major challenge for the club. Even more so in the face of strong Spanish-speaking competition (MAD Lions KOI, GiantX...) and the multiplicity of communication platforms. The company must continually adapt to these changes to remain relevant. Aware of the challenges and the value of a strong, committed fanbase, Team Heretics has chosen to invest in innovative strategies to maintain and increase their audience - such as the Heretics Hub - but recognises that much remains to be done.

Keen to prove to the various stakeholders in their ecosystem that esports companies can grow organically and make their investments profitable, the directors are altruistic and lucid in explaining that if their success inspires new investment in the sector, even if not directly from Heretics, they will be delighted because it will benefit the industry as a whole. Finally, Heretics is a firm believer in the synergy between entertainment sectors, including the involvement of influential sports figures such as their NBA club owner investor. They believe this is a strong testament to their credibility and the potential of the ecosystem to create relevant business connections.

"Team Heretics' adventure is an inspiring example of resilience and strategic vision. By navigating through financial and operational challenges while remaining true to our values, we have proven that sustainable and organic growth is not only possible, but also beneficial to the entire esports industry. We continue to innovate and adapt to stay at the forefront of the industry, with the ambition of becoming the biggest club in the world", conclude Antonio Catena and Arnau Vidal.