New Wave Esports Corp. (CSE:NWES) is well positioned to capitalize on a growing global esports market that is expected to reach $1.9B in revenue by 2021
SmallCapPower | November 7, 2019: New Wave Esports Corp. (CSE:NWES) is an esports and competitive-gaming focused investment company based in Toronto, Ontario and Los Angeles, California. 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. Over the last few weeks, the Company’s stock has been trading between $0.10 and $0.12, which implies a market cap of ~$8.5M (77.7M shares outstanding). NWES has 59.8M warrants with an average strike of $0.21 and 14.9M convertible securities. NWES’ first day of trading was on October 28, 2019.
- Significant exposure to the growing esports market – $1.9B in global esports revenue expected by 2021.
- Invested in Tiidal Gaming, which operates Lazarus, which has 50+ pro players and 12 teams in 12 countries.
- Lazarus won $3.5M in the Fortnite World Cup in NYC.
- Owns 18% (with option to expand to 49%) of Even Matchup Gaming, an events-based and tournament organization company, which hosted Get on My Level 2019 in Toronto, which had more than 2,100 players and 1M unique Twitch viewers.
- Invested in PlayLine, a daily fantasy sports gambling app, where users predict the stat lines of athletes and compete against other players (250K+ users).
- Acquired Thunderbolt CDG, a software applications and technology development company that has provided services for 40+ startup companies. They are currently conceptualizing tools and solutions in the near future to meet the growing needs of the esports industry.
Esports Industry Macro Highlights
Esports is a fast-growing industry that is expected to reach $1.1B in revenues during 2019, with a year-on-year growth of +26.7% (newzoo, 2019). Of the total revenue, 82% will come from media rights, advertising and sponsorship. New Wave Esports is favorably positioned through its investments to benefit from this lucrative revenue segment.
Figure 5: Esports Global Audience Growth
Source: (newzoo, 2019)
Through the Company’s equity stake in Even Matchup Gaming, it will be able to capitalize on the most-viewed segment of esports in 2018, fighting games (newzoo, 2019). For reference, during 2018, League of Legends had a total of 347.4M hours watched and Fortnite had 1,636.8M hours watched. Currently, Even Matchup Gaming has over 25.8M social impression, more than 5.5M YouTube Views and over 1.8M Twitch views.
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, with 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 is 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 and won $3.5M in the 2019 Fortnite World Cup.
Figure 1: Lazarus Esports team at the Fortnite World Cup in New York (July 2019)
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 making successful tournaments, featuring fighting games such as Smash Bros, Tekken, Dragon Ball, and Street Fighter. The Get on My Level 2019 Canadian Fighting Game Championship (GOML 2019) was held at 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.
In March 2019, New Wave Esports invested $250,000 in Even Matchup Gaming and currently has 18% ownership with the option to acquire 49%, and is up almost 2x on its investment with EMG pulling more revenue year over year.
Figure 2: End of a Tournament Match in Toronto (May 19, 2019)
Source: David Patlut/ESPAT Media/Getty Images
Platforms & Networks
The Company’s portfolio companies within the platforms and networks vertical earns revenue streams through sponsorships and ads, merchandise sales and user monetization
PlayLine: In March 2019, the Company invested $250,000 into PlayLine, a daily sports betting platform, to help with business growth, audience expansion, and is up almost 2x as PlayLine continues to grow their user base and optimally monetize. Currently the platform has 250,000 users, with its Average Revenue per User (ARpU) and Lifetime Value per User (LVpU) both experiencing continuous growth.
PlayLine is a phone app, where users predict the stat lines of athletes and compete against other players. The closer to the athlete’s performance the better the chance of winning. There are different contest types, including tournaments and head to head. PlayLine was founded by UFC Middleweight Champion Michael Bising, and it has secured NBA All-Star Roy Hibbert as its Investor/Strategic Partnership manager. The platform currently has 250K+ users. Notably, PlayLine is also partnered with NASCAR for full on-site race activations. The Company plans to introduce an esports betting component using a Twitch Rivals program.
Figure 3: Example of the PlayLine Phone App
Source: Google App Store
Avatar One Esports Capital Corp: In August 2019, the Company invested $150,000 into Avatar One Esports Capital Corp., an esports acquisition vehicle, and is up 3x on the investment due to strategic capital deployment of the shell into an esports betting platform. The Team has currently raised over $1M and has the potential to expand into more esports gambling companies.
Technologies & Tools
Allows the Company to earn revenue through sponsorships and ads and 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.
Figure 4: Overview of New Wave Esports’ Business Development
Source: (New Wave Investor Deck, 2019)
Daniel Mitre, CEO & Managing Partner
Daniel Mitre has over 17 years of experience in marketing video games, develop and player communications, and creating large-scale communities for AAA franchises, which has included esports and competitive gaming experiences. Daniel has worked with large industry players, such as EA, Sega, THQ and Activision-Blizzard, as well as reputable developers, including DICE, BioWare, Maxis, and Respawn. He is also a co-founder of Thunderbolt CDG, and an advisor to Tiidal Gaming and the Gaming Society. Notably, he has been engaged in global campaigns and communications for several major franchises, which include Battlefield ($1.6B title), FIFA ($1.5B/year), and The Sims ($599M/title).
Trumbull Fisher, President & Managing Partner
Trumbull Fisher brings more than 15 years of capital markets experience. Throughout this time, he raised substantial amounts of capital for a variety of different industries. Mr. Fisher Co-Founded FDB Capital, a real estate development firm, and Sui Generis, a hedge fund. He has also worked as a Trader at several investment banks, including the National Bank of Canada, M Partners, and Casmir. In addition, he is also a member of Think Technology’s Board of Directors, and an Advisor to Tiidal Gaming.
Clayton Fisher, Financial Advisor
Clayton Fisher brings more than 10 years of experience as an Investment Advisor. He has managed over $400M in assets globally. He has held positions at companies such as Canaccord, Raymond James, and Think Technologies.
Tiffany Lee, CFO & Corporate Secretary
Ms. Lee currently works as a Controller at Mojave Jane Brands Inc. Previously, Ms. Lee was a Senior Staff Accountant at Constellation Software Inc. and Intermediate Staff Accountant at Hub International.
Jarrett Hasson, Head of Asia Business Development
Mr. Hasson brings almost 20 years of experience as a global Investment Professional. Prior to joining New Wave Esports, Mr. Hasson worked for several of Canada’s leading alternative asset managers in portfolio management roles. In 2013, he was part of a two-person team that won the Lipper Award for top hedge fund in Canada for three-year performance. Prior to entering portfolio management, Jarrett worked for one of Canada’s leading investment banks where he structured various mergers and acquisitions, restructurings and capital raising mandates.
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