Blue Star Capital portfolio continues to deliver in H1, updated valuations expected by year-end

Post date Jun 2023

Blue Star Capital (BLU), a holding company with a focus on new technologies, reported half-year results for the 6 months ended 31 March 2022. Blue Star made no new capital investments during the period, while its two principal investments representing 94% of its portfolio – SatoshiPay (blockchain and payments) and Dynasty (esports and gaming) – continued on their upward trajectory with significant operational progress achieved in H1 2023.

To date, Blue Star has invested £968k in Dynasty. Based on Dynasty’s last valuation of US$50m, Blue Star’s holding in the company is now valued at approx. £5.4m.

Also, as of March 31 2023, Blue Star has invested approx. £1.9m in SatoshiPay, which represents a shareholding of 27.9% of SatoshiPay’s issued share capital, worth £4.3m based on the last external fund raise in 2019. Blue Star believes the valuation of SatoshiPay may have increased significantly since 2019, and has therefore appointed a specialist to carry out a formal sales process to ascertain SatoshiPay’s market value, without a commitment to accept any offer.

Blue Star’s pre-tax loss registered a small increase to £1.16m from £1m last year while its cash position increased to £155k from £113k. The value of its quoted portfolio held on 31 March was approximately £147k.

BLU’s NAV per share as of 31 March was 0.2p, compared to its current share price of 0.147p. This represents an attractive entry point, especially in light of the abovementioned third party valuation process for SatoshiPay, expected to complete by end of 2023.

Portfolio highlights

Dynasty has built a successful esports and gaming platform since Blue Star’s initial investment 4 years ago. Dynasty recently began the transition from a pure SaaS provider to an operator of its platform as recent deals have seen it expand ownership into its partners’ businesses. Major deals signed by Dynasty include October 2022’s distribution agreement with Indosat Ooredoo Hutchison (IOH), Southeast Asia’s second largest telco; and a 50/50 joint venture in Australia with Lets Play Live in May 2023.

Dynasty is also building relationships with two of Blue Star’s other portfolio businesses, Googly Media Holdings and Paidia Gaming, whereby it is sharing 50% of all revenue generated.

Since Blue Star’s initial 2017 investment, SatoshiPay has developed its Pendulum Network Project to facilitate instant payments. Pendulum is a blockchain infrastructure company, aiming to decentralise forex and traditional finance through a smart contract network. During the period, Pendulum achieved several major milestones, including completion of its crowdloan as a precursor to it becoming a Polkadot Parachain; and the release of “Spacewalk”, a blockchain bridge connecting the Stellar and Polkadot networks.