“The capital raise is because we need going concern of 12 months,” PlayUp chief executive Daniel Simic said in response to questions. “[The raise] is being done via BetClub because we are unable to raise capital directly through PlayUp whilst the FTX convertible note issue is not resolved.”
PlayUp cannot raise more than $10 million because that would trigger a clause in the FTX note that would increase the collapsed crypto firm’s equity in the Australian business, which sources said had been an issue with financiers who performed due diligence on the company.
It hopes to use the proceeds to shore up its Australian business and push its new Bettaverse product, which combines its daily sports fantasy offering, DraftStars, with its wagering product. PlayUp acquired DraftStars in 2018. It was founded in 2015 by Matthew Tripp and James Packer-backed CrownBet. Seven West Media, Fox Sports and the AFL were shareholders.
SPAC hopes dashed
PlayUp’s hopes of tapping the Nasdaq fell over in January after a special purpose acquisition company, a shell company set up for transactions, terminated a deal announced in September to acquire the gaming business. The SPAC valued PlayUp at $US350 million.
“Despite the SPAC’s repeated requests for the company financial statements, the company has failed to deliver the company financial statements and has provided no indication of when the company financial statements will be delivered or if they will be delivered at all,” IG Acquisition Corp, the SPAC, said in a statement to the Securities and Exchange Commission in January.
Mr Simic said PlayUp did not deliver the financial accounts because it became clear the SPAC did not have the money for the $US350 million transaction. SPACs typically have 18 to 24 months to complete a transaction, and IG Aquisition Corp told its shareholders it would not complete the acquisition of PlayUp within the timeframe. Investors in the SPAC redeemed outstanding shares at $US10.12.
PlayUp had $20.8 million in revenue in 2021, up from $17.5 million the previous year, according to the company’s most recent financial accounts. In those same periods, it recorded losses of $14.2 million and $8.9 million respectively.
Numbers for the 2022 and 2023 financial years are yet to be filed with the Australian Securities and Investments Commission, but Mr Simic said Australian revenues were about $32 million and the company had “a promising path to profitability”.
Mr Simic bought the PlayUp brand, which was previously part of a sports technology business, out of liquidation in 2016 – he was not previously involved in the business. It had a high-profile list of investors before its collapse including Mr Turnbull, Bruce Mathieson, former Telstra chairman Bob Mansfield, David Paradice, Allan Myers and former star cricketers Steve Waugh and Adam Gilchrist.
PlayUp is also in a heated legal battle with its former US boss in American and Australian courts. PlayUp, in court, alleges that Laila Mintas threatened to blow up the sale of the business to FTX over an alleged salary dispute. Ms Mintas denied the allegations, blamed other PlayUp executives and lodged a counter-claim against the company.
Source: afr.com
George Barham, an accomplished journalist and avid gambling enthusiast, serves as the esteemed Editor-in-Chief at fly-to-australia.com, Australia’s leading source for comprehensive gambling news and insights. With an unwavering passion for both the written word and the ever-evolving world of betting and gaming, George brings a wealth of knowledge and expertise to the helm of our editorial team.
