Shot in the arm for e-sports market as David Beckham-backed enterprise is UK’s first to float
David Beckham’s e-sports company Guild Esports started trading on the London Stock Exchange today.
The firm, which trades under the ticker GILD, is the first major e-sports company to go public in the UK.
Guild Esports said earlier this week that its oversubscribed offering of 250m shares was priced at 8 pence per ordinary share.
Former England captain Beckham is an original shareholder and will hold a 4.78 per cent stake in the company, according to a prospectus filed with the UK Listing Authority.
Boost for e-sports market
The float means a boost for the electronic sports sector, an industry that experienced rapid growth in recent years.
According to Hiran Adhia, a client manager at global branding and design agency Landor, Guild Esports going public is one of the biggest signals yet that e-sports is an industry investors are starting to take more seriously.
“”[This float] has certainly got the international community talking and major players and investors have no choice but to now pay close attention”, Adhia said.
The demand for online sports, where people watch players video gaming, has grown over the pandemic. Guild claims that some tournaments are attracting a bigger audience than Wimbledon, Tour de France or the US Open.
“[After] having perceptually trailed behind traditional sports franchises for the last 20 years, out of the limelight, e-sports has built a mammoth international fanbase”, Adhia continued.
The global e-sports market is valued at $1.1bn and is project to grow by 42 per cent to $1.56bn, according to games market insight company Newzoo.
Investor interest
Jamie Peel, director of corporate finance at Zeus Capital, which acted as joint broker and bookrunner on the Guild Esports transaction, recognises Adhia’s observations.
“The gaming industry has exploded in popularity, with e-sports quickly becoming a mainstream form of entertainment”, Peel said. “This is only expected to accelerate in the coming years.”
Sophie Goossens, a partner at Reed Smith, told City A.M. that today’s flotation is “as clear a sign as any” that investors are flocking towards the e-sports industry.
“We can surely expect a number of companies to swiftly follow in Guild’s footsteps”, she said.
So far this year, in the wake of Covid-19, Goossens has seen e-sports tournaments and matches receive increased attention from “sports-starved fans”.
“Under current conditions they can be considered an investment that carries considerably less risk, due to the fact the sector can function entirely online”, she added.
Beckham brand
Banking on the global influence of David Beckham’s brand, Guild has floated 40 per cent of its shares. Adhia said that celebrity endorsements are a major factor in driving e-sports in the UK and across Europe.
“This has already proved a great strategy in other parts of the world – with big stars like Michael Jordan investing large amounts into e-sports and using their personal brands to drive colossal growth in people playing and watching,” he said.
In February this year, Gareth Bale launched Ellevens Esports, which is co-owned with 38 Entertainment Group.
“Guild has been hot off the mark to take full advantage of this opportunity,” Adhia added.
Guild’s strategy
Guild will use the raise to expand the business, including recruiting new players. The company said it is looking to scale into various e-sports disciplines over the course of this year and next.
Beckham is the fourth-largest shareholder in the company. Other investors include Toro Consulting, Blue Star Capital and Schroder Investment Management.
Along with Beckham, the existing Guild team is made up of e-sports veterans with experience as professional players and coaches as well as those in e-sports media. Executive chairman Carleton Curtis is an architect of the Overwatch League and Call of Duty Leagues.
Guild Esports is currently trading at 7.88p per ordinary share.
