British esports firm Gfinity puts itself up for sale

British esports company Gfinity has put itself up for sale in order to “capitalise” on the growing professional gaming market.

The London-based company, which was headed up by former Manchester City chief executive Garry Cook up until March, has opened a strategic review of the business but has insisted there is “no certainty” of an offer coming forward.

Launched in 2012, Gfinity hosts professional esports tournaments across the likes of FIFA, Call of Duty, and Starcraft. The firm has also agreed partnerships with Formula 1, the Premier League, Sky.

In May, Gfinity agreed a deal with BT Sport to broadcast the FIFA Challenge, where teams led by current and former professional footballers played against one another during lockdown.

Gfinity said it was “exceptionally well positioned” to meet the needs of its customers after “considerable corporate development” due to the pandemic.

“The emphasis has shifted to virtual online capabilities utilising the strength of its technology and e-sports know-how rather than just the delivery of physical events,” the company said in a statement.

“In  conjunction with this, the group has rapidly created an unrivalled esports community network.”

The company, which raised £2.25m through a share placing in April, said that it was targeting profitability by the end of March next year.

Its board said it remained “highly confident” in the company’s prospects with market dynamics changing “rapidly and permanently in favour” of Gfinity’s business model.

“Given this, while the board believes that the company can continue on its current pathway towards  profitability it believes, at this point in time, that it is important to all its stakeholders to ensure that it  has explored all strategic options to capitalise on the potential market opportunity and to deliver  shareholder value, including options for making acquisitions, forming partnerships, separating the  activities of the group or a potential sale of the company,” Gfinity said.

Shares in the AIM-listed company jumped 25pc to 4.2p on the news.

In the 12 months to the end of June 2019, revenues at the business almost doubled to £7.9m. Operating losses also shrank to £8.6m from £12.2m year on year.

The popularity of esports has swelled significantly in recent years and has been amplified by the pandemic forcing people to spend more time at home. Global revenues will grow to $1.1bn (£840m) this year, up from $950.6m last year, according to figures from games analytics firm Newzoo. Three quarters of revenues come from sponsorships and media rights. Newzoo has tipped media rights and sponsors to be worth $1.2bn by 2023.

Earlier in the month, David Beckham-backed Guild Esports raised around £20m from its listing on the London Stock Exchange.​

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