Rivalry announces $10M strategic investment, FY22 and Q1 results
Sharpr is a weekly newsletter covering the intersection of esports and betting
Hi everyone, Cody here.
What a week. I’m back in the saddle after spending a week in Charleston, SC (which is lovely by the way – I can only describe as New York City and California having a baby on LSD) and ready to round out April with a dense issue of the newsletter.
The big one this week of course is Rivalry’s FY22 earnings and $10M CAD strategic investment from Pinnacle.
Let’s get into it.
In this week’s edition of Sharpr…
Rivalry announces $10M strategic investment, FY22 and Q1 results.
RVEC adds creative, brand executive as advisor.
Oddin establishes Lima trading hub to optimize operations for Western markets.
If this newsletter was forwarded to you, please consider subscribing.
Sponsored by Bayes Esports
Introducing BODEX, a first-of-its-kind platform that provides esports betting operators with odds, streams, widgets, and statistics with single mapping and integration. BODEX allows esports betting operators to subscribe to odds from multiple providers, enabling them to improve their esports products with the best services available. Contact us to take your esports betting offering to the next level with BODEX.
Rivalry announces $10M strategic investment, FY22 and Q1 results
Rivalry has announced a $10M strategic investment led by bookmaker Pinnacle alongside the release of its Q4, FY22, and preliminary Q1 financial results. All dollar figures represented in this story are quoted in Canadian dollars.
Pinnacle, as well as technology and payments stakeholders, participated in the non-brokered private placement expected to close on or about May 5.
The investment builds on a commercial relationship between the two bookmakers, where Pinnacle serves as Rivalry’s oddsmaking partner.
The proceeds will be used to pursue strategic growth opportunities and scale the return of its Millennial and Gen Z-focused strategy.
The company net triple-digit growth across all key metrics in FY22. Betting handle was $232.8M, revenue was $26.6M, and gross profit reached $9.8M. Net loss grew to $31.1M, up from $24.3M in 2021.
Esports betting continued to serve as a key growth driver, accounting for approximately 90% of sportsbook handle in 2022. Tentpole esports events in Q4 (including League of Legends Worlds, IEM Rio, and The International) likely contributed to the $83.6M in betting handle generated in the quarter.
Preliminary Q1 results also surpassed all previous quarterly records. Most notably, revenue is expected to reach an all-time high of $12M, a year-over-year increase of 151%, while marketing spend reduced by 10% over the same period.
User registrations grew to 1.5M at the end of Q1, more than doubling the 610K registrants at 2021 year-end. Millennial and Gen Z consumers represented 97% of its active users.
In November 2022, the company launched its 90’s-skinned interactive casino product Casino.exe, which was noted as helping offset sportsbook seasonality and drive an increase in betting volume. The product has since expanded into Ontario with a slate of new third-party games, as well as forthcoming in-house developed titles planned for later in the year.
Rivalry CEO Steven Salz said: “Underpinning our growth is significant brand loyalty among the Millennial and Gen Z audience and true product innovation in online betting, enabling every marketing dollar to go further, enhancing retention, and creating a distinctly unique platform. Rivalry continues to be economically rewarded for taking an inventive approach to the betting experience and tailoring it for a demographic with unique consumption habits.”
🦈 Sharpr Take: I’ll respectfully keep my analysis here brief. Though I will say, I’ve covered Rivalry for many years as a reporter before joining the team full-time last year, and have always admired the company’s approach to this space. I did however offer more unfiltered thoughts in a LinkedIn post earlier this week, if you’re interested.
Rivalry’s playbook is one that I believe the broader online sports betting industry can take a page from. This approach emphasizes true brand equity, product differentiation, and a highly targeted demographic of users, as opposed to the broader, bonus-driven marketing strategies often taken up by incumbents.
I’ll stop there, but I highly recommend reading Rivalry’s shareholder letter which speaks more to why this particular approach is now crystallizing in the context of industry conversation.
(Disclaimer: I am a full-time employee of Rivalry.)
RVEC adds creative, brand executive as advisor
The Esports Trade Association’s Regulated Video Games and Esports Committee has named creative director and brand developer Hez Chorba as an advisor.
Chorba is a decorated creative and brand development executive with a background developing legacy entertainment franchises such as Star Wars, Indiana Jones, Harry Potter, and more.
As an advisor, Chorba will address “ethical concerns” in esports such as player safety, fair play, responsible gaming, and assisting the committee in developing these guidelines.
He will also be tasked with fostering partnerships between game developers, tournament organizers, and other stakeholders to help further growth of the ecosystem.
The RVEC is an internal advisory group launched in March 2022 to “create best practice guidelines and technical standards” for competitors, regulators, and bettors participating in esports wagering.
The founding group included G3 Esports CEO Anthony Gaud and Odds on Compliance VP Eric Weiss, and added William J. Pascrell III as an advisor in February.
Oddin establishes Lima trading hub to optimize operations for Western markets
Esports supplier Oddin has established a trading hub in Lima, Peru to expand its efforts in Western Markets.
The move is said to enhance Oddin’s coverage of esports tournaments and optimize trading for Western timezones, noting it will “double down” its commitment to the US, Canada, and Latin America.
The Lima office will house roughly 10 traders, though the company plans to eventually grow the team to 40.
Oddin is licensed in New Jersey and has partnerships with Betway, Sportsbet.io, and LOOT.BET.
The company hinted at an upcoming announcement yesterday that suggests it may soon be adding some form of sim racing to its offering.
🗞 In the news
Sportradar names former EA and Zynga executive Gerard Griffin chief financial officer.
Millennials spend more time playing video games than Gen Z and teens, according to a new study.
UK regulators blocked Microsoft’s $75B deal to acquire Activision.
📈 By the numbers
Ontario sports bettors wagered $35.5B (excluding promo bets) in the first year of regulated iGaming.
Only 33% of ESL Pro League partner teams have betting sponsors, down from 50% last year.
Gambling.com revenue is set to reach $26.9M in Q1 2023.