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Mobile Esports Company Skillz Going Public With DraftKings Owners Sixth SPAC

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Mobile Esports Company Skillz Going Public With DraftKings Owners Sixth SPAC

Skillz, the first mobile esports platform, will go public via SPAC Flying Eagle Acquisition Corp (NYSE: FEAC).

About Skillz: Skillz is a leading mobile esports gaming platform for competitive tournaments.

“Today we’re a leader in casual esports and are well-positioned to capture the global esports opportunity which will increasingly define the gaming market,” Founder Andrew Paradise said.

In 2017, Skillz was named the fastest-growing company in America by Inc. Magazine.

Key Takeaways: The transaction values Skillz at $3.5 billion, which is 6.3 times estimated 2022 revenue of $555 million. The company expects revenue of $225 million in fiscal 2020, year over year growth of 88%. Fiscal revenue has climbed from $17 million in fiscal 2017 to $120 million in the last full fiscal year.

Mobile games are the fastest-growing segment with sales expected to go from $68 billion in 2019 to $150 billion in 2025. Over 2.7 billion people play games monthly.

The 62 minutes per day spent on Skillz are more than peers see with TikTok averaging 52, Facebook (NASDAQ: FB) 41, Google's (NASDAQ: GOOG) YouTube 40, "Candy Crush" 37, Snapchat (NYSE: SNAP) 28 and the mobile gaming average of 17.

Skillz also counts an ARPU of $6.30 in 2019 than mobile gamers Zynga Inc. (NASDAQ: ZNGA) and Glu Mobile Inc (NASDAQ: GLUU) who have ARPUs of $1.51 and $1.89 respectively. ARPU grew to $7.72 in the second quarter of fiscal 2020.

Flying Eagle Acquisition: This is the sixth SPAC from investing duo Jeff Sagansky and Harry Sloan. The duo was part of the team that successfully brought DraftKings (NASDAQ: DKNG) to the public markets.

Sloan has been involved with video games dating back to 1999. He is an investor and board member of ZeniMax Media, owner of Bethesda Game Studio and one of the first big esports games “Quake.”

“I’ve been active in the evolution of gaming for 20 years and I believe Skillz has position itself as the platform for the future of gaming,” Sloan said.

Price Action: Shares of Flying Eagle Acquisition Corp hit new highs of $14.70 on Wednesday, ending the day with gains of more than 25%.

 

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