Mobile games platform Skillz to go public

[SAN FRANCISCO] Mobile games platform Skillz on Wednesday announced plans to become a publicly traded company using a tactic that sidesteps an initial public offering of shares.

Skillz said it will merge with Flying Eagle Acquisition, which is already trading on the New York Stock Exchange, essentially taking the shell company's place after the transaction is complete.

The deal has been approved by both company boards but must get the endorsement of shareholders and regulators.

San Francisco-based Skillz facilitates competitive events between players of games tailored for mobile devices powered by Apple or Google-backed Android software.

The company anticipated that this year its platform would be a stage for more than two billion esports tournaments involving some US$1.6 billion in entry fees.

Video game matches enjoyed as spectator sports, complete with prize money and merchandising deals, were a sizzling trend before the pandemic fueled even hotter interest.

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"Today we're a leader in casual esports and are well positioned to capture the global esports opportunity which will increasingly define the gaming market," Skillz founder and chief executive Andrew Paradise said.

The transaction values Skillz at US$3.5 billion, more than six times its projected revenue for the year 2022, according to the company.

Under the terms of the deal, Skillz will get a combined US$849 million from Flying Eagle and an outside investment group directly purchasing shares, according to the startup.

The company plans to use money from the deal to fuel domestic and international growth.

"I've been active in the evolution of gaming for 20 years, from ZeniMax to DraftKings, and I believe Skillz has positioned itself as the platform for the future of gaming, where entertainment, gaming and enablement converge," Flying Eagle chief executive Harry Sloan said.

Skillz cited estimates from industry trackers Newzoo and GlobalData that mobile is the fastest growing segment of the gaming market, predicted to increase from US$68 billion last year to US$150 billion in 2025.

AFP