PlayOn fantasy sports gaming company values itself at €35m

PlayOn, an Irish-owned fantasy sports gaming company chaired by Maurice Pratt, has valued itself at £30 million (€35 million) as part a drive to raise cash to fund a global rollout.

The business, based in Dublin and London and founded by former Merrion Capital analyst Killian Jones, is in the middle of the first of two fundraisings this year to raise about £9 million. Mr Jones told potential investors in Dublin this week that PlayOn is also in talks to attract institutional investment.

He said he aims to build the startup, which has already signed partnerships with NBA basketball and European Tour golf, into a business worth £250 million.

It wants to raise an initial £2 million from investors before June 2nd, for a 6.67 per cent stake in the business. It will sell more shares later this year for a further 16 per cent stake.

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“Following the recent announcement of our partnership with the NBA, we have launched an EII [Employment and Investment Incentive] eligible fundraising round for Irish investors,” Mr Jones said. “This will be followed by a larger institutional investment round in the second half of 2017, which will fuel our continued expansion into regulated markets.

“We expect that to be our last fundraising round, as we move towards profitability thereafter.”

PlayOn operates in the daily fantasy sports betting market in regulated countries, such as Ireland, Britain and Australia. It has signed up users from more than 100 countries.

Pick a team

Users are given a fantasy $100 million to pick a team of seven sportspeople from the sports featured on the app. Their team accumulates points based on the performance of the sports people in real life.

Users can then choose to pit their team against other PlayOn users for real money, but only in a fully regulated and legalised gaming market.

As well as seven sports including the NBA and European Tour, Mr Jones said the business is also in talks with ATP tennis, the International Cricket Council and National Rugby League in Australia.

He said PlayOn has also had preliminary talks with Uefa, the administrator of professional soccer across Europe.

The business is currently not focused on breaking into the lucrative US market, where online betting and gaming for real money is mostly illegal. A few states, such as Nevada and New Jersey, have regulated, but the market is still in its infancy and is considered risky for investors due to federal restrictions.

PlayOn is focused on Britain, Ireland and Australia, but it is also targeting several large, economically developing nations that have regulated, or are in the process of doing so, for real-money online gaming.

Mr Jones said PlayOn is currently setting up a company in Mexico, where NBA basketball is a major attraction. It also looking at Colombia, Lithuania (another basketball stronghold), France and Russia. India, Brazil and the Philippines are also on its radar if, as planned, those countries regulate online gaming.

Projected loss

The business, which Mr Jones quit the stockbroking world to found during the recession, is still at start-up phase and will have only revenues this year of less than £2 million, with a projected loss even higher than that figure.

However, having built its technology platform and started rolling out licences and partnerships, PlayOn is now getting ready to scale up. It is forecasting revenues of more than £10 million in 2018, and up to £72 million within a further five years.

Investors were told that the cash raised will be used for marketing and to grow the team at its Dublin and London bases.

The holding company is headquartered in Britain, hence the reason its projections are in sterling.

It is heavily Irish-backed, however. Mr Pratt is an investor, along with several early investors from the agribusiness scene, and the horse trainer Dorothy Kinirons.

The company’s financial projections and business plan were communicated to potential investors in Ireland during the week.