Rivalry announces strategic investment by Pinnacle

April 26, 2023 8:46 PM
Photo: Rivalry Ltd.
  • Mark Keast, CDC Gaming Reports
April 26, 2023 8:46 PM
  • Mark Keast, CDC Gaming Reports

Esports betting platform Rivalry on Wednesday announced a $CAD10 million ($USD7.3 million) strategic investment led by global bookmaker Pinnacle, the same day it reported a 198 percent increase in full-year betting handle in FY 2022 ($CAD232.8 million, ending Dec. 31, 2022).

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The company also reported a 140 percent increase in revenue ($26.6 million) and 349 percent increase in gross profit in FY 2022 ($9.8 million).

In Q4 2022, betting handle was at $83.9 million (up 237 percent year over year), revenue was $9.4 million (up 338 percent year over year) and gross profit was $5 million (up 1,152 percent year over year).

The company also announced preliminary Q1 2023 results,  with betting handle of $120.2 million (up 199 per cent YoY), revenue of $12 million (up 151 percent YoY), and gross profit of $5.4 million (up 698 percent YoY). The company said these were achieved with a 10 percent reduction in marketing spend YoY.

“Our market strategy and operational excellence continue to build on 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,” said Steven Salz, co-founder and CEO of Rivalry. “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.”

Esports represents nearly 90 percent of sports betting handle in 2022 and total user registrations grew to 1.5 million, with Millennials and Gen Z representing 97 per cent of active users. The company added mobile esports to its sportsbook in March 2022, entered the casino segment with its first third-party game in Q3 2022, and launched its proprietary platform Casino.exe in the fourth quarter with several additional games.

The investment led by Pinnacle, which includes other sports-betting, technology, and payments stakeholders, will enable Rivalry to expand its esports offerings with new titles and betting markets, along with continued product development catering to their core audience.

“We have reached an inflection point in the business where the economic return of our strategy and unique position at the intersection of esports and betting has outlined a clear path to profitability,” Salz said in a statement. “We are well positioned to scale efficiently throughout the year, with a collection of near- and long-term initiatives that will contribute to our disruptive product and brand.”