Rivalry nets new $7.3m investment after record-breaking Q4 & FY22

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Toronto-based sports betting and esports betting firm Rivalry achieved a record-breaking fourth quarter in 2022, notably seeing its revenue rise 338% from Q4 2021.

Publishing its Q4, full-year and preliminary Q1 2023 results, the company recorded C$9.4m/$6.9m in revenue in Q4 2022 (Q4 2021: C$2.2m/$1.61m), its highest-ever revenue up to that point and up 7.2% sequentially from the previous quarter (C$7.1m/$5.21m), driven by sportsbook revenue of C$7.1m/$5.21m (Q3: C$6.1m/$4.48m).

Gaming revenue of $1.69m was up 119% over Q3 ($810,000) as Rivalry began offering a wider set of casino games on its Casino.exe platform, and its expanded offering resulted in higher betting handle of $61.55m in Q4, up 19% sequentially from the previous record quarterly handle of $51.58m in Q3, and a YoY increase of 237% compared to $18.27m in Q4 2021.

Among the highlights of the Q4 period for Rivalry was the launch of a new esports Pick’em game with Low6 for the 2022 League of Legends World Championship and The International 11, while the sportsbook also struck a new licensing agreement with Genius Sports and the NFL regarding the distribution of the league’s livestreams.

Set up for future success

Rivalry’s success in Q4 also contributed towards triple-digit growth across all key metrics in FY2022, with full-year betting handle up 198%, revenue up 140%, and gross profit up 349%, positioning the firm to make more records in its preliminary Q1 2023 results, where it recorded betting handle of $88.19m (up 199% YoY), revenue of $8.8m (up 151% YoY), and gross profit of $3.96m (up 698% YoY).

Steven Salz, Co-Founder and CEO of Rivalry, commented: “Our market strategy and operational excellence continues to build upon consecutive record-setting quarters, driving a strong finish to the year and a robust Q1, while simultaneously demonstrating sequential narrowing losses on our path to profitability.

“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.”

Obtaining a license in the newly-regulated Ontario market last April has had a significant effect on Rivalry’s operations, with its Casino.exe platform recently debuting eight new casino games in the province.

Investment opportunities

The push to ‘accelerate its operational objectives and pursue strategic growth opportunities’ has now seen the company secure $7.34m investment through the issuance of up to 6,666,666 Subordinate Shares at a price of $1.10 per SS.

Explaining the non-brokered private placement financing, Salz said: “The terms and strategic value of the stakeholders participating in this round represent a vote of confidence in our one-of-a-kind team, market strategy, and unique ability to execute within this emerging vertical.

“Our 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.

“We are growing rapidly with a successful strategy in place and talented team behind us, and with this funding we anticipate both continuing our pace of growth and our trend toward profitability.”

The financing is expected to close in one or more tranches commencing ‘on or about’ May 5, with global bookmaker Pinnacle leading the investment round.

“As a leader and innovator in online betting, Pinnacle is constantly looking for like-minded partners to help further grow the industry and our global footprint,” remarked Paris Smith, Pinnacle CEO. “That is what led us to Rivalry, and it is impressive how in a short period of time, they have carved out a powerfully unique position in the field of online betting.

“The company’s long-time focus on product innovation, brand equity, and next generation consumers is disrupting traditional ways of thinking in the industry and blazing a trail for industry economics that were previously not thought possible.

“As a long-standing commercial partner of Rivalry, we’ve had a front row seat to their incredible growth and are confident in the company’s trajectory.”