The San Francisco company took advantage of the boom in the game industry, which has grown quickly this year as people turn to games for solace during the pandemic. The stock price gain echoes the strong performance of other game-industry companies, such as Unity’s recent initial public offering (IPO).
Skillz’s market value is now more than $7 billion, or double the initial price of $3.5 billion. The company went public through a quick initial public offering process known as a special purpose acquisition company (SPAC). This has become a popular way for fast-moving companies to go public without all the hassle of a traditional IPO. SPACs are set up by managers who raise money in a blind shell company, and the investors don’t know what they’re putting their money into.
Skillz provides a platform to turn any mobile game on iOS and Android into one you can play with friends or strangers for cash, prizes, or points. And it enables esports tournaments for games that integrate into its platform.
“We’re really excited about the next phase of the company and building with support from the public markets,” CEO Andrew Paradise said in an interview with GamesBeat today.
In its most recent third quarter ended September 30, the company reported revenues of $60 million, and it has reported higher engagement thanks to the pandemic, much like the rest of the game industry. Skillz has a relatively small base of 2.7 million monthly active users, but the keyword on that is active. Paradise pointed out that this is a tiny fraction of the 2.7 billion gamers in the world, and so there is a lot of time to grow.
“Certainly the pandemic has been an advantageous this year with 35% quarter-over-quarter growth,” Paradise said. “But the reality is that this has been growing very rapidly before the pandemic. It’s about a secular shift to interactive entertainment. The pandemic has only really accelerated this trend and shift that was already happening.”
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