Skillz shares surged in its commercial debut as investors embraced a company touting itself as the first publicly traded mobile esports company.
The stock climbed 29% to $ 22.73 on Thursday afteran agreement with a specialized acquisition company, or SPAC, which allowed it to go public.
Skillz allows 2.7 million players per month to compete against others on their mobile phones for points or prizes in games such as Solitaire Cube and Blackout Bingo. The mobile tournament provider runs around 1,700 tournaments per second, chief executive Andrew Paradise said in an interview.
“If you think of Skillz, we are the only significant mobile esports company in the world,” he said. “If you are looking for exposure in mobile esports, Skillz is truly the best investment you can find.”
Skillz effectively enables small to medium-sized game developers to make money without having to sell to a larger company or resort to advertisements, which many users find annoying. Consumers pay tournament fees, of which Skillz takes a 14% discount.
With Public Skillz, “developers don’t have to worry about our financial viability, they can just research it,” Paradise said. Skillz also makes money through brand sponsored advertising.
A merger with the blank check company Flying Eagle Acquisition Corp. allowed Skillz to go public – an avenue that is becoming increasingly popular for companies looking to avoid the hassle of an initial public offering. Investors included Wellington Management, Fidelity Management & Research, Franklin Templeton and Neuberger Berman.
For nine months of the year, Skillz’s revenue increased 91% to $ 162.4 million. But the company is not yet profitable: it has lost $ 78.5 million, compared to a net loss of $ 14.9 million in the first nine months of 2019. Skillz has $ 250 million in cash and no debt.
The San Francisco-based company’s user base has more than tripled in the past two years and plans to use its cash for international expansion, targeting markets such as India, Paradise said.
Paradise previously founded and sold the start-up AisleBuyer, allowing consumers to check in stores via their mobile phones, to Intuit Inc. in 2012.
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