ESE Entertainment

ESE Entertainment has interests in gaming, media production, and esports. The company generates revenue through media rights, sponsorships and advertising, events and merchandise, and competition earnings. ESE’s esports assets include its professional esports teams (K1CK brand acquired in November 2020) competing in titles such as League of Legends, Apex Legends, FIFA 20, Counter-Strike, and Rocket League. In addition, the company provides the physical and digital infrastructure for esports leagues and events. It owns and operates Rocketmania, one of the largest Rocket League competitions in Europe and owns exclusive media rights in Poland for the Rocket League Championship Series. In January 2022, it announced the expansion into the metaverse and intends to build products for Decentraland and The Sandbox.

It also operates a simulation racing unit called Virtual Pitstop (launched more recently in March 2021). Virtual Pitstop is expected to develop 3D models of real-life racetracks, and VR and AR content, initiate R&D on non-fungible token (NFT) applications in sim racing and organize global digital motorsport events. In the H1 FY 2021, ESE Entertainment reported around CAD 290,000 (approximately USD 230,000) in revenue from advertising and events.

In December 2020, ESE announced a binding share purchase agreement with World Phoning Group Inc. and Encore Telecom Inc. (together, WPG) to expedite ESE’s strategy to establish its presence in the European market and become a global brand. In line with this, the company opened a new broadcast studio in Warsaw, Poland in February 2022. It closed the acquisition of European esports media and production infrastructure company Frenzy in October 2021 (initially announced in September 2021). Moreover, it acquired Auto Simulation Limited T/A Digital Motorsports (Digital Motorsports) in August 2021.

Key customers and partnerships

In February 2023, ESE formed a strategic alliance with Poznań Game Arena and Metapro to host the first-ever Web3 Game Arena. The partnership aimed to explore the possibility of combining the gaming, esports, metaverse, DeFi, and GameFi industries. This was followed by a USD 5 million contract with an undisclosed European video game developer and publisher to provide its technology and user acquisition services in October 2022, a partnership with European esports entertainment company Cowana Esports in March 2022 . As of October 2022, the company has more than 350 partners.

Funding and financials

Most recently, ESE announced the closing of a private placement of convertible note units to raise USD 1.6 million in February 2022. The funding was used for potential acquisitions, business development activities, and working capital. Along with this, it closed a previously announced public offering of USD 15 million, raising net proceeds of USD 13.6 million in the process. ESE raised CAD 1.3 million (approximately USD 2.3 million) while listing on the Toronto Venture Exchange in August 2020.

In FY2022, ESE reported revenue growth of more than 5x to CAD 58.8 million (~USD 45.6 million) from CAD 11.4 million (~USD 9 million). Gross profit recorded more than 6x growth to CAD 7.7 million (~USD 6.0 million) from CAD 1.2 million (~USD 0.9 million). ESE reported a significantly improved adjusted EBITDA loss of CAD 0.2 million (~USD 0.2 million), compared to a loss of CAD 3.5 million (~USD 2.8 million) in FY2021.