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.

In November 2019, Blue Star 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$1.8 billion for 2022. 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. Since making the original investments, Blue Star has made follow on investments in both Guild Esports and Dynasty Esports plus a new investment of £115,500 into FORMATION esports for a 9.6% stake.

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:

Guild Esports plc, formally The Lords Esports plc, is a UK based company with a focus on the European eSports market.

On 25 June 2020, Guild announced its global launch and association with David Beckham, an investor in Guild. Guild is developing a talent pipeline in the UK, based on the traditional academy model, with the intention that the most able esports players are coached and nurtured by industry leaders in order to attain the skillset required to compete professionally. Guild’s intention is for a roster of scouts to continually find and sign the best young talent.

Guild has established a management team of esports veterans with experience as professional players, coaches and esports media. Guild Executive Chairman, Carleton Curtis, is well-known in the industry and architect of the Overwatch League and Call Of Duty Leagues. Prior to joining Guild, he held senior esports roles at Activision Blizzard and Red Bull. His expertise complements David Beckham’s position in the world of mainstream sports to create a unique esports proposition.

Guild intends to develop into various esports disciplines over the course of the 2020/2021 season with its first team making its debut in autumn 2020 expecting to compete in the most popular titles including Rocket League, EA Sports FIFA and Fortnite. The Company’s ambition is to build a culture of excellence around its brand and digital presence.

Blue Star holds 11.7 per cent. of the issued share capital of Guild.

Dynasty Esports PTE is a Singapore-based business addressing the Malaysian market.

On 24 June 2020 Dynasty announced that it has signed a five year exclusive partnership agreement with Malaysia ESports Federation (“MESF”,) to provide its eSports Portal Management (“EPM”) platform to enable effective management and control of the eSports ecosystem within Malaysia.

Dynasty’s EPM platform will be fully white-labelled, customised and branded for MESF and will bring together the main elements of the eSports ecosystem being the players, the organisations and the tournaments, under one single integrated digital platform with the intention of providing a shared national and global view of the eSports industry.

Under the terms of the partnership agreement, MESF will actively endorse, promote and drive all eSports related traffic in Malaysia to the EPM platform. MESF will also regulate and ensure that all domestic eSports events, leagues or tournaments in Malaysia will be exclusively hosted on the MESF platform as the single destination site for eSports. 

The Malaysian gaming and eSports ecosystem is considered to be one of the more developed markets for eSports. Malaysia is estimated to have over 20 million gamers who spent an estimated RM 2.9 billion (approximately GBP543 million) on gaming in 2019. 

Dynasty will generate income throughout the term of the partnership via a matrix of revenue streams including management fees, advertising, sponsorship, exclusive eSports broadcast rights (both nationally and internationally), and other revenue share arrangements with MESF.

Blue Star holds 13.7 per cent. of the issued share capital of Dynasty.

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.

FORMATION Esports SAS is incorporated in France and has been established to launch a dedicated esports platform aimed at providing contact sports clubs with revenue and sponsorship generating opportunities and increased exposure. FORMATION will cover the entire spectrum of contact sports fans and clubs. In addition, FORMATION expects to launch its own academy with physical workshops across France and Europe.

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.