Investments

CLEAR FOCUS ON CAPITAL APPRECIATION FROM A DIVERSIFIED PORTFOLIO OF QUOTED AND UNQUOTED INVESTMENTS

SatoshiPay is a digital payments company that uses blockchain to offer payment services in three areas – micro-payments, digital wallets and business to business (B2B) cross border payments.

Micro-payments represent a growing market segment. These are transactions that can be as low as a few cents, and are often uneconomical using conventional payment technologies. Applications include online publishing (pay per view), gaming, and consumer reward programmes. The SatoshiPay platform offers instant end-to-end payments at a level of commission that makes payments viable for merchants and customers. SatoshiPay has commercial partnerships in place with online publishers such as Axel Springer and Börsenmedien.

Digital wallets are a mechanism allowing consumers to make payments using their mobile or desktop device. The Solar wallet from SatoshiPay, powered by the Stellar Network, has more than 25k installments in 40 countries. It is recommended by the Stellar Development Foundation, which coordinates the Stellar network.

B2B cross-border payments are the most recent market for SatoshiPay. In November 2019, the company announced the new SatoshiPay B2B service, using the same technical platform as the existing products. This is the largest segment in the global payments market and represents an exciting growth opportunity for SatoshiPay.

Having initially acquired 10.68% of SatoshiPay in January 2017, the Company increased its stake on two further occasions and now holds 27.9%. The Company is valuing its shareholding in SatoshiPay at £4.6m.

In June 2015 the Company invested £50,000 in Sthaler Limited, an early stage identity and payments technology business which enables a consumer to identify themselves and pay using just their finger at retail points of sale. Sthaler jointly developed Fingopay in conjunction with Hitachi. Fingopay uses a unique finger vein ID process which is considered to be more secure than finger print readers and faster than chip and pin operations. The technology is widely adopted in Japan and it is Sthaler’s aim to commercialise the technology in the area of payments globaly.

Since making its initial investment, Sthaler has raised funds at significantly higher valuations and the Company’s 0.9% shareholding is Sthaler is now carried in the Company’s accounts at the most recent external valuation which values it at £350,000.

Blue Star has invested approximately £150,000 in each of six esports businesses. The esports sector is experiencing significant growth and according to estimates by games and esports analytics provider Newzoo, may see total global esports market revenue increase to US$1.1 billion for 2019. The largest component of this estimate relates to sponsorship, media rights and advertising and the Company will take advantage of this growth opportunity by investing in franchises and infrastructure investments targeting different regions globally.

It is the intention of each of the companies in which Blue Star has invested to create or acquire a competitive esports franchise to generate revenue from tournament winnings, digital marketing opportunities, sponsorship, membership, merchandise and promotional tours and events. Each of the companies is targeting a different region globally for financing and team building but all will attempt to become global brands. Blue Star is investing at an early stage in each of these companies and as part of its investment Blue Star has secured the right to invest in future rounds of each company to allow it to maintain its position, if it so chooses. Details on each of the companies is summarised below:

The Guilds Esports plc, formally The Lords Esports plc, is a UK based company with a focus on the European eSports market. The Company has acquired Cyqiq gaming (https://www.cyqiqgaming.cc/) and will launch in Q2 2020.

Googly esports plc is a UK/India based company with a focus on the Indian market. The company aims to be the largest and most respected professional eSports franchise and events/media company.

The Dibbs Esports corp is a US incorporated business based in Los Angeles. The Company will be a female only team and will compete in the North American eSports market.

Diemens Esports PTY Ltd (“Diemens”) formally The Cubs is an Australian based company. On 3rd February 2020 Diemens announced it’s intention to merge with Critical Hit Entertainment. A further update will be made in due course.

The Drops Esports Inc is a Canadian based company. On 12th January 2020 The Drops entered into a letter of intent with Fibresources Corporation to acquire the entire issued shared capital of The Drops for common shares in Fibresources. A further update will be made to the market in due course.

Dynasty Dynasty Esports PTE is a Singapore-based business addressing the Malaysian market. Malaysia is already a rapidly growing market for e-sport, and we believe that this will be accelerated by a programme of government investment that is already underway, aimed at making Malaysia a regional hub in the e-sport industry. Blue Star’s shareholding in Dynasty is 13.7%.

Blue Star has invested approximately £57,000 into Leaf Mobile which recently listed on the TSX Venture Exchange in Canada. Leaf Mobile owns a catalogue of available and to be launched mobile games.