Today we’ve provided updates on New Wave Esports Corp. (CSE:NWES), including a recent financing, an addition to its Board, and an acquisition
SmallCapPower | February 21, 2020: New Wave Esports Corp. (CSE:NWES), a CSE-listed, competitive-gaming focused investment company, announced recently the closing of a $555K convertible debenture financing, sold at a 10% discount, for gross proceeds of $500K.
- Obtains non-dilutive 500K financing on competitive terms
- Gaming Expert Chris Mancil joins Board of Directors
- Completed acquisitions of Event Matchup Gaming, increasing equity position to 49%
- New Wave Esports enters into LOI to acquire Activate Entertainment – an esports events production company
- The esports industry is expected to grow rapidly to $3.1B by 2022E, implying a 35% 5-year CAGR
- Recall from our esports peer analysis, New Wave Esports Corp. (CSE:NWES) remains our highest conviction idea in the space because it has the largest presence in esports teams, events, and content distribution, which are expected to be the main esports revenue drivers
In our view, with the recent acquisitions and addition to the Board it sets up New Wave Esports (CSE:NWES) to become to the premier esports investment management and events company.
NWES obtains non-dilutive financing. The convertibles convert into common shares at $0.10/share, in addition to one $0.15 warrant/share. Both the convertible and warrants have a maturity of February 13, 2022; the convertibles do not bear any interest payments until maturity.
Gaming expert Chris Mancil added to the New Wave Esports Board. Mr. Mancil is a 19-year video game industry expert specializing in community management and influencer relations. During the past seven years, Mr. Mancil led Core Community at Electronic Arts, helping EA redefine its long-term player relationship strategy across iconic brands such as Battlefield, The Sims, Titanfall, Plants vs Zombies, EA Sports FIFA and Madden.
New Waves Esports enters into LOI to acquire Activate Entertainment. NWES plans to acquire the company for US$1M, subject to due diligence. The deal is expected to close by March 31, 2020. Activate is a creative management and event production services company specializing in esports, with operations in LA and Las Vegas. Activate Entertainment offers full 360 turnkey solutions for professional, high-quality livestreams of esports events and tournaments.
Completes acquisition of Event Matchup Gaming. Event Matchup hosts 80+ tournaments per year. Event Matchup Gaming’s flagship event, Enthusiast Gaming Live Expo (EGLX), is hosted at the Metro Toronto Convention Center, in conjunction with Enthusiast Gaming (TSX:EGLX). The event boasts an attendance of 30,000, with pre-sales tickets starting at $55. In addition, Event Matchup Gaming hosts the largest Super-Smash Bros. competition, Get on My Level (GML), which had ~1,200 attendees in 2019, with an average ticket price of $50.
About New Wave Esports
The Company offers capital and advisory services (acting as an operator in portfolio companies) to the esports industry, primarily to teams, organizations, events, tournament organizers, platforms, networks, technologies, and tools. The Company currently has two main business lines: Teams, Events, and Tools.
Teams & Organizations
Through this segment of the Company’s operations, New Wave Esports’ portfolio companies within the teams and organizations vertical earns revenue through sponsorships, ads, merchandise sales, game publisher fees, prize purses, as well as league and content distributions.
- Tiidal Gaming is a professional esports and entertainment company that operates team Lazarus, one of the world’s highest-grossing teams in terms of winnings. Founded in 2010, Lazarus was Canada’s first established esports team and is comprised of 12 pro teams (50+ players) across 10 countries. Lazarus operates in multiple platforms and has won a total prize pool of $4.7M, over 60+ podium finishes, and 32+ tournament wins. Most of Lazarus’ winnings has been generated through Fortnite.
- Part of Tiidal Gaming is Space Esports, a North American esports tournament operator. The Company hosts several monthly online tournaments and has a sizable social media presence.
In March 2019, New Wave Esports invested $400,000 into Tiidal and gained two advisory seats (resulting in 250k stock options), to help support Tiidal’s growth in esports and entertainment, and NWES current up 4x on its investment due to revenue growth within Tiidal. Tiidal Gaming Lazarus Esports became one of Canada’s first esports brand. Lazarus is one of the highest-grossing teams in the world, winning $3.5M in the 2019 Fortnite World Cup.
Events & Tournament Organizers
New Wave Esports events and tournament organizer portfolio companies earn revenue through sponsorships and ads, merchandise sales, ticket sales, media rights, user monetization and production services.
Even Matchup Gaming (EMG)
- EMG is a Toronto-based leading esports and competitive gaming event organizer, broadcaster, and player management company that coordinates online and live tournaments. Even Matchup Gaming has over 80 events a year and a strong online audience.
- EMG hosts 80+ events per year and the audience continues to grow, with more than 7,400 attendees, 25.8M social impressions, 5.5M YouTube views, and 1.8M Twitch views.
- EMG is known for creating successful tournaments, featuring fighting games such as Super Smash Bros., Tekken, Dragon Ballz, and Street Fighter. The Get on My Level 2019 Canadian Fighting Game Championship (GOML 2019) was held at the Exhibition Grounds in Toronto (50,000+ sq. ft of space) in May 2019. It was EMG’s sixth tournament of the series. Turnout was strong, reaching 2,100+ attendees and 847 contestants for the Ultimate tournament, where the top singles player won $5,000 in prize money.
- Activate is a creative management and event production services company specializing in esports with operations in LA and Las Vegas.
- Activate Entertainment offers full 360 turnkey solutions for professional, high-quality livestreams of esports events and tournaments.
Technologies & Tools
Allows the Company to earn revenue through sponsorships and ads as well as user monetization.
Thunderbolt CDG: In January 2019, the Company finalized its acquisition of Thunderbolt, a software applications and technology development company that has currently offered its services to over 40 start-up companies. Thunderbolt conceptualizes tools and solutions to meet the growing needs of the esports industry.
Ubika Research/SmallCapPower has received compensation from New Wave Esports Corp. to provide analyst research coverage. For full disclosure please visit here >>
To read our full disclosure, please click on the button below: