Blue Star Capital (BLU ) told investors that it believes it is well-positioned to benefit from the growth it is witnessing across its portfolio.

Guild Esports

To date, the investment company, which is focused on investing in new technologies, has invested around £0.706m in Guild Esports, and holds around a 5.95%  of the issued share capital of Guild valuing its investment, at the current share price of 6.65p, at around £2m.

Guild was admitted to the Official List and started trading on the standard segment of the London Stock Exchange in October 2020 to take advantage of the growing esports markets.

Since its admission to trading, Guild has achieved a number of important milestones, including attracting a number of sponsorship deals including Subway, a European fintech Company and Hyper X, a gaming peripheral brand. Meanwhile, the Company has also launched merchandising opportunities including in-game decals and a clothing range.

Guild expanded its team and player signing, with both team acquisitions and the signing of top-ranked players to compete in tournaments for games such as Fortnite and FIFA.

In addition, in March 2021, Guild won its first major trophy in the European Grand Finals of the Fortnite Champion Series, which was followed by a second trophy win at the EU Spring Regional Rocket League Champion Series in April 2021.

Dynasty eSports

To date, Blue Star has invested around £0.895m in Singapore-based business Dynasty eSports and, based on Dynasty's valuation of US$50m in this latest fundraising round, the Company's holding in Dynasty is valued at approximately US$6.5m (around £4.6m).

Since June 2020, Dynasty has gone on to sign a number of other SaaS agreements for the provision of its platform, notably to the largest telecoms carrier in the Middle East to launch a branded Dynasty platform in a number of the region's key esports and gaming countries. 

Dynasty has successfully raised additional funding, most recently in April 2021 in which Blue Star participated, raising $5m and increasing Dynasty's post-money valuation to US$50m. 

This funding will allow it to continue to develop its EPM platform, with the intention to focus on enhanced player personalisation, games publishing, rights management and the use of AI to support an automated experience in coaching and media creation. Dynasty has said that it intends to seek an IPO on the Australian Stock Exchange within the next year. 

SatoshiPay 

To date, the Company has invested around £1.9m in fintech firm SatoshiPay. Based on the value of SatoshiPay's last fund raise, Blue Star's investment is valued at around £4.9m.

SatoshiPay launched its B2B payments platform DTransfer back in September 2020 to facilitate cross-border payments for businesses. Later in December 2020, SatoshiPay said it had signed an agreement with German Bankhaus von der Heydt to become the first user of the bank's fully compliant Euro-backed stablecoin which it is integrating with DTransfer.

This agreement provides SatoshiPay with a stable on and off-ramp for EURB transactions with instant EUR-based bank transfers within the Single Euro Payments Area which it said will ‘allow users with an easy solution to instantly send and receive euro-based payments.’

Separately, Blue Star recently invested £0.25m in NFT Investments, an investment firm targeting non-fungible tokens, a specialised class of assets that certifies authenticity and proof of ownership of digital assets. Its investment in NFT is now valued at £0.342m.

Meanwhile, Leaf Mobile, in which the firm invested CAD$0.1m in April 2020, completed the acquisition of East Side Games Inc. for around $159m in February 2021 and commenced trading on the Toronto Stock Exchange. Leaf announced revenue of $80.5m for the year ended 31 December 2020, a 116% increase over 2019 revenue of CAD$37.2 million.

The share price for Leaf is currently trading at around CAD$0.47 per share valuing Blue Star's holding in Leaf at around CAD$293,750.

Derek Lew, CEO of Blue Star said, "This latest market update supports Blue Star's strategy of investing in early-stage disruptive tech businesses that make up our portfolio. We strongly believe that we are well positioned to benefit from the growth in esports, gaming, fintech and now most recently NFTs.”

View from Vox

Blue Star disclosed back in January that the value of its investment portfolio had grown by c.78% in its final results for the year ended 30 September 2020, moving it into profitability.  

In particular, the esports market is experiencing significant growth. In 2020 it was estimated at around 495m viewers and is projected to reach around 646m viewers by 2023.  

This is expected to result in revenues growing over the same period from $950m to $1.60bn.  The stock was trading 2.78% higher this morning at 0.185p following the update.

Reasons to BLU

Blue Star is an investing company with a focus on new technologies. Its investments include a 27.7% holding in SatoshiPay, a payments business using blockchain technology; investments in 6 early stage esports companies with shareholdings ranging from 5.9% to 13.6% and a 0.9% investment in Sthaler, an identity and payments technology business which enables a consumer to identify themselves and pay using just their finger. 

The company provided an update in respect of its esports portfolio back in December 2020 as well as its investee companies - The Drops Esports Inc and Diemens Esports PTY Ltd. 

Since the group’s initial £0.9m investment in six esports opportunities in November 2019, Blue Star has invested around £1.68m across seven companies. It has since invested in Guild Esports PLC, Dynasty eSports Pte Ltd and, most recently, in FORMATION Esports SaaS. 

Based on the current valuation of Guild which was admitted to the standard segment of the LSE’s main market on 2 October 2020, and the higher valuation achieved by Dynasty in its subsequent fund raises, Blue Star's esports portfolio is now valued at £3.71m showing an unrealised gain of £2,035,890 and an increase of approximately 120%.   

In its FY20 final results for the year ended 30 September 2020, which moved the group into profitability, the group said it had made a profit for the period of £1.7m compared with a loss in the corresponding period of £0.68m. The group cited the major contributor factor as ‘the uplift in valuation’ achieved on its investments in Guild Esports and Dynasty Esports.   

The group hailed “an excellent year with strong performance” from its esports portfolio as well as “encouraging progress” from its tech payment businesses. It said its portfolio was successfully diversified with the move into esports which is now seen as its major focus.   

Given the market growth and potential commercial opportunities, the Board ‘firmly believes’ that esports will eventually take up a significant proportion of the global sports industry. 

Specifically, over the last twelve months, Blue’s esports portfolio has enjoyed two major successes and at the year end the valuation of the esports portfolio stood at around £3.8 million compared with an accumulated investment to date of approximately £1.7 million.   

The board remains ‘highly confident’ in the strong underlying trends in esports and believes there is significant upside to be achieved moving forward from the esports portfolio.   

Cash as at 30 September 2020 was £0.132m compared to £0.12m in the corresponding period. Post the year end the Company raised £0.095m through the exercise of warrants.   

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