Astralis Group goes public, valued at $75 million
Astralis Group has begun trading on the Nasdaq First North Growth Market Denmark.
Its shares started at a 9.50 DKK price and, after some initial volatility, settled around the 8.90 mark. At market close the share price was 8.95, valuing the company at 508 million DKK, or ~$75 million USD.
For comparison, on Forbes’ most recent Most Valuable Esports Companies list, Cloud9 and Team Liquid shared the number one spot at an estimated $400 million value. Astralis doesn’t compete in near as many titles, however.
In total Astralis Group sold 16,759,777 shares in its IPO. It had already accomplished this in pre orders before trading opened. This means that it has collected gross proceeds to the tune of 150 million DKK or ~$22.2 million USD.
More teams to follow?
Astralis Group had announced its IPO plans a few months ago, after it was spun out of production company RFRSH Entertainment. Besides being home to the eponymous Counter-Strike: Global Offensive team, it also operates the Origin brand in League of Legends and Future FC in FIFA.
It is the first team and only one of a select few esports companies to go public. In the future, we may see other organizations follow suit, to raise money for things like franchise fees or training facilities. Of course, this route does not come without challenges. Going public means having to disclose commercial information that some organizations prefer to keep private. Teams can also not really be valued on winnings alone, as these fluctuate and are shared with the players. As such, they require additional income streams to sway investors.
The Danish success is important for non-teams as well. While the nascent esports industry has seen tremendous growth over the last few years, many are still struggling to convert said growth into profits. Astralis Group itself, despite owning the most successful CS:GO team of all time, currently operates at a loss.
Earlier this year, community platform Super League Gaming was the first esports company to go public. It did not go well. Opening at $11 a share, nine months later it trades at $2.70. A second failure, especially by a brand of Astralis’ stature, could be seen as a lack of confidence in the scene as a whole.
What’s next for Astralis?
In its prospectus, Astralis Group has outlined a three year plan for growth. According to this, 50 to 60% of its newly raised capital will be set aside for league buy-ins. Part of this money will go to paying off a loan it took out to acquire Origin's LEC slot. The rest will be used to gain entry into new franchised leagues. The company expects more of these to be created for Counter-Strike and other titles in the future.
Astralis will also invest in building out its fanbase and developing new products. These will include the usual merchandise, but digital ones too. An example given of this is that of a subscription service for exclusive online content.
Today the company was also one of several to announce their entry into Konami's PES eFootball.Pro league. It will operate a team in collaboration with Italian soccer club Juventus.
Main Image Credit | Astralis Group