? IPO
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San Francisco-based mobile games platform Skillz plans to go public on the New York Stock Exchange through the business combination with publicly-traded special purpose acquisition company Flying Eagle Acquisition Corp. (NYSE: FEAC)
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The transaction is based on Skillz’s equity valuation of $3.5B, which is equivalent to 15.6x Revenue 2020E or 6.3x Revenue 2022E. The company demonstrates negative EBITDA over the last 3 years, and expects to achieve positive profitability in 2022 year
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Key transaction terms include:
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Investors are expected to own $849m worth of the post-transaction public company (roughly 25%)
— $690m estimated cash proceeds (Flying Eagle’s cash in trust)
— $159m investment in the form of a PIPE -
Post-transaction Skills is expected to have around $250m of cash and its equivalents on its consolidated balance sheet
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Money raised would go towards improving marketing efforts, increasing working capital and accelerating Skillz expansion on the global market
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Skillz founders Andrew Paradise and Casey Chafkin will keep their positions as company’s leaders
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Both companies’ boards of directors have approved the deal, however, it still requires stockholders and certain regulatory approvals. The transaction is subject to customary closing conditions and is expected to close in the fall of 2020
? Previous Rounds
Total Skillz’s capital invested accounted for $104m as of June 30, 2020:
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In November 2019, Skillz has raised an undisclosed amount of money in a Series D round from new investor 32 Equity
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In December 2017, Skillz has raised $25m in a Series C round led by Telstra and Liberty Global, with participation from Andy Miller, Bridge Bank, and existing investors Accomplice and Wildcat Capital Management
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In September 2015, Skillz raised $15m in a Series B round led by Wildcat Capital Management, with participation from The Kraft Group, Marc Lasry, Sequoia Capital and other existing investors
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In September 2014, Skillz raised $6m of funding in a round led by Atlas Venture
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In June 2013, Skillz raised $5.5m in a Series A round led by Atlas Venture
? Product
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Skillz is a mobile multiplayer competition platform with over 3.5 million daily tournaments, 20 thousand game developers, 30 million players and 60 million monthly prizes
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The platform helps developers to set up tournaments and competitions in their multiplayer games, presenting an alternative monetization method to the free-to-play and premium business models
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The company expects to host over 2 billion casual esports tournaments in 2020, facilitating $1.6B from the entry fees
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Among the company’s most successful supported titles are Solitaire Cube, Blackout Blitz, 21 Blitz, Dominoes Gold, Bubble Shooter Arena
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Additionally, the company enables players to support non-profit organizations like American Red Cross, American Cancer Society, and NAACP through participation in tournaments
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Skillz is a two-time winner of CNBC’s Disruptor 50, Forbes’ Next Billion-Dollar Startups, Fast Company’s Most Innovative Companies, and the #1 fastest-growing company in America on the Inc. 5000
⚙️ About Flying Eagle
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Established in 2020
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Headquarters — Los Angeles, California, United States
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Founded by Harry E. Sloan, Jeff Sagansky, Eli Baker and Alan Mnuchin
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Special purpose acquisition company
SOURCES: VENTUREBEAT, BUSINESSWIRE, SKILLZ
