Rivalry nets C$10m strategic investment led by Pinnacle
Paris Smith-led online operator spearheads investment which will help the esports betting firm to expand its offering and further its product development
Rivalry has received a C$10m (£5.88m) strategic investment from Pinnacle and other sports betting, technology and payments stakeholders.
The financial injection will come in the form of a non-brokered private placement through the issuance of up to 6,666,666 subordinate voting shares at a price of C$1.50 per subordinate share.
The investment will help further the operator’s esports offering, which accounted for 90% of the firm’s sportsbook handle in 2022.
The capital will also go towards continued product development and will be geared towards Rivalry’s core audience of Millennial and Gen Z users, which accounted for 97% of the operator’s users last year.
Lastly, the investment will go towards furthering Rivalry’s content creation with its various partners in the esports space.
Steven Salz, co-founder and CEO of Rivalry, said: “The terms and strategic value of the stakeholders participating in this round represent a vote of confidence in our one-of-a-kind team, market strategy and unique ability to execute within this emerging vertical.
“We are growing rapidly with a successful strategy in place and talented team behind us, and with this funding we anticipate both continuing our pace of growth and our trend toward profitability.”
Paris Smith, Pinnacle CEO, added: “As a leader and innovator in online betting, Pinnacle is constantly looking for like-minded partners to help further grow the industry and our global footprint.
“That is what led us to Rivalry, and it is impressive how in a short period of time, they have carved out a powerfully unique position in the field of online betting.
“The company’s long-time focus on product innovation, brand equity and next-generation consumers is disrupting traditional ways of thinking in the industry and blazing a trail for industry economics that were previously not thought possible.”
On Pinnacle’s specific involvement, Salz commented: “Our commercial relationship with Pinnacle stretches back several years, leveraging their market-leading esports and risk management solution to provide a best-in-class offering for our users.”
This investment builds on a record year for Rivalry, with revenue in full-year 2022 increasing 140% year-on-year (YoY), reaching C$26.6m.
Gross profit for the firm came in at C$9.8m, representing a 349% YoY increase from the C$2.2m posted in 2021.
The handle for the year was C$232.8m in 2022, which is a 198% YoY increase compared to C$78.2m.
The operator also reported preliminary results for Q1 2023. The betting handle for the opening quarter was C$120.2m, representing an increase of 199% YoY from Q1 2022.
Revenue for the first quarter was C$12m, an increase of 151% YoY, with gross profit coming in at C$5.4m, up from C$700,000 in Q1 2022.
In addition, these results were achieved with a 10% reduction in marketing costs from Q1 2022.
Looking ahead to the rest of the year, Salz said: “We have reached an inflexion point in the business where the economic return of our strategy and unique position at the intersection of esports and betting has outlined a clear path to profitability.
“We are well-positioned to scale efficiently throughout the year, with a collection of near and long-term initiatives that will contribute to our disruptive product and brand.”