Skillz

Skillz is a multiplayer mobile gaming platform that hosts tournaments for various online games, allowing users to compete for large cash prizes. Skillz holds two core patents, granted in 2016, for its growth drivers: 1) The ”fair play algorithm” determines whether a game is skill-based (crucial for legal compliance in cash prize games in the USA) and 2) “tournament management system” (TMS) enables developers to integrate games onto the Skillz platform. In June 2023, the company expanded to Las Vegas by acquiring a 36,045 sq ft building for its new headquarters.

In June 2021, Skillz announced its USD 150 million cash and stock acquisition of Aarki, a mobile marketing platform powered by machine learning and AI. This acquisition broadened Skillz’s revenue streams and provided cost synergies by optimizing marketing spend. To further diversify its market, Skillz launched a pilot program in India in December 2021.

Skillz went public in September 2020 through a USD 3.5 billion merger with SPAC Fly Eagle Acquisition, listing on the NYSE. For FY2023, Skillz reported a 44.3% YoY revenue decline to USD 150.1 million, reflecting ongoing challenges in user acquisition and retention12. The company's paying monthly active users (PMAU) decreased to 179,000, indicating a continued decline in the player base. However, the average revenue per paying monthly active user (ARPPU) improved to USD 70.0, suggesting better monetization of remaining users. The company recorded an adjusted EBITDA loss of USD 70.1 million for the year, showing a 42.7% improvement from the previous year.

Key customers and partnerships

In March 2022, Skillz entered a multi-year partnership with the UFC, the world’s leading mixed martial arts organization. The agreement provides Skillz and its developer community licensing rights to create UFC-branded esports mobile games, which were set to launch in 2023 and co-marketed by both organizations.

Skillz also partnered with Exit Games in August 2021, investing USD 50 million for a minority stake in the company, the developer of Photon, a leading real-time multiplayer game development technology. The partnership granted Skillz exclusive access to Exit Games’ technology, enabling the platform to support synchronous multiplayer games like racing, fighting, and first-person shooters.