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Rivalry reported triple-digit growth across all major indicators in FY22. The Toronto-based company has announced that it will be raising up to $10 million in gross proceeds through a non-brokered private placement financing, as the company looks to boost its growth strategy. The investment will come from the issuance of up to 6,666,666 subordinate shares at a price of $1.50 per share as Rivalry seeks to establish its market-leading position among digitally native consumers. This latest development follows record-breaking results for the sports and esports betting firm in 2022 and early 2023.
Steven Salz, Co-Founder and CEO of Rivalry, explained that the terms and strategic value of the stakeholders participating in this round indicate a vote of confidence in Rivalry’s unique team, market strategy, and its exceptional ability to execute within this emerging vertical. He stated that the company’s playbook is built around a generational opportunity to capture and engage a next-generation audience through world-class creative, proprietary and engaging products, and market-leading brand equity in esports. He added that the funding will help them maintain their pace of growth and trend towards profitability.
With this investment, Rivalry aims to target two key areas of its business. Firstly, it will use the capital raised to expand its esports offering, which accounted for almost 90% of sportsbook handles in 2022. Secondly, the company will continue to develop products for its core audience of Millennial and Gen Z users, who accounted for 97% of active users last year.
The strategic financing round will be led by sports betting, technology, and payments stakeholders, including global bookmaker Pinnacle, which has a commercial relationship with Rivalry spanning several years. Pinnacle provides its esports and risk management solution to the Toronto-based firm’s users. Pinnacle CEO Paris Smith stated that the company is constantly looking for like-minded partners to help further grow the industry and their global footprint. He added that Rivalry has carved out a powerfully unique position in the field of online betting in a short period, disrupting traditional ways of thinking in the industry and blazing a trail for industry economics that were previously not thought possible.
Rivalry’s recently published results support its new growth strategy, subsequent investment search, and the recent launch of eight new casino games in Ontario via Casino.exe. The final quarter of 2022 saw the firm record its highest-ever revenue ($9.4m) up to that point, driven by sportsbook revenue of $7.1m. Gaming revenue of $2.3m was up 119% over Q3 ($1.1m) as Rivalry began offering a wider set of casino games on its Casino.exe platform. Rivalry’s expanded offering resulted in a higher betting handle of $83.9m in Q4, up 19% sequentially from the previous record quarterly handle of $70.3m in Q3, and a YoY increase of 237%.
Meanwhile, Rivalry saw triple-digit growth across all key metrics in FY2022, with full-year betting handle up 198%, revenue up 140%, and gross profit up 349%. Salz commented that 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.