Skillz has started the procedure for entering the stock market

According to a statement on Skillz’s official website, the esports platform has decided to enter the stock exchange bypassing the traditional IPO procedure. She chose to merge with a special Purpose acquisition company (SPAC).

Flying Eagle Acquisition will become a partner in the deal with Skillz. Its owner, Harry Sloan, has already used the SPAC approach with DraftKings, an American fantasy competition operator.

As a result of the agreement between Flying Eagle and Skillz, the latter’s capital estimate ($3.5 billion) is 6.3 times higher than the estimated revenue of the platform in 2022 ($555 million). At the same time, the company itself has not made a profit for three years.

It is expected that the proceeds from the transaction will amount to $849 million. Of these, $690 million will be in the trust management of Flying Eagle, and $159 million will be invested by funds through private investments in the company’s exchange-traded shares (PIPE). It is already known that the investors will be Wellington Management Company, Fidelity Management & Research Company, Franklin Templeton and Neuberger Berman.

When Skillz goes public, it will have about $250 million on its consolidated balance sheet. The company plans to spend this money on marketing and its own development. Co-founders Andrew Paradise and Casey Chafkin will continue to lead Skillz.

Skillz is a mobile esports platform that conducts 3.5 million tournaments daily. According to the company’s forecast, 2 billion competitions will be held on its basis in 2020, for which users will pay $ 1.6 billion to enter.

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