Telstra scores with esports play as Skillz prepares to list
Skillz announced on Thursday it is going to list through a special acquisition company, a popular way for fast growth companies to go public without having to undertake an initial public offering. The startup will raise an estimated $US849 million in cash from investors at a $US3.5 billion pre-money valuation, which is 6.3 times Skillz’s projected revenue for 2022 of $US555 million.
Like most gaming companies, Skillz’s revenue has boomed as a result of COVID-19 with people turning to games during lockdowns.
Telstra Ventures is also an investor in the largest esports franchise in the world, Team SoloMid, and Mr Patel said the sector holds plenty of promise.
“We are very much believers in gaming and esports being a big part of interactive media more generally,” he said. “Skillz really taps into a fundamental human emotion around competition… what Skillz has done through their software is allow any game developer to incorporate that mechanic in their game and competitive gameplay for cash prizes or otherwise, where you have real skin in the game, that’s a totally different dynamic when it comes to monetisation.”
Mr Patel added while mobile games have been traditionally monetised through advertising networks on Apple, Google and Facebook, Skillz enabled monetisation in a more “authentic” way.
“The broader vision is at some point we start to compete against Apple and Google and all large ad networks, as an alternative monetisation engine without any advertising,” he said.
The esports sector is also a key vehicle for Telstra’s 5G ambitions with the telco giant claiming 5G has the potential to revolutionise the entertainment industry.
Skillz founder and chief executive Andrew Paradise said faster 5G networks provided increased opportunity for esports.
“Real-time multiplayer competition relies on the ability to think and act quickly, which can be a challenge with slower mobile networks,” he said. “As network speeds improve, we should see even more developers creating multiplayer games for a growing player base.”
Mr Paradise said becoming a public company was an important milestone for Skillz.
“We look forward to accelerating growth as we work with our developer partners to bring Skillz-powered competitions to every kind of game for billions of gamers worldwide,” he said.
Cara is the small business editor for The Age and The Sydney Morning Herald based in Melbourne