Phantasm due diligence report.
Hatchworks has conducted due diligence on Phantasm, an upcoming esports social betting platform.
Phantasm, the esports betting operator and a startup, that has been added to Hatchnet, is doing an IEO soon. Their estimated valuation is $1.85M. Based on the expectations of the project’s founder the financial forecast shows the following figures: significant net-income growth of 107% for 2020E and 2021E. The upcoming startup also expects that the revenue for 2020E will be $335,000, thereby implying a P/R multiple of 5.5x. Their expected net income for 2020E shows a figure of $186,000 which implies a P/E multiple of 10x.
By looking at Phantasm’s operating margin forecast for 2020E, which is 80%, we see that it is notably higher than the operating margin of competitors such as William Hill. In this scenario, Phantasm claims to be able to outperform all competitors in terms of operating profitability. It is worth noting that at present, Phantasm is in prototype mode in closed beta and does not yet have any revenues. In our view Phantasm is a high-risk investment which Hatchworks will not be pursuing at present, as we prefer lower risk-adjusted-reward options.
The Hatchscore is 3.75 out of 10. Full details can be found on Hatchnet: www.hatch-net.com/companies
What is Phantasm?
Phantasm.io allows bettors to follow verified experts to place bets. They bring experts, who already provide betting tips and record their calls to verify their win rates, into the industry. There will also be a leaderboard where users can explore and start following their favorite experts. If a bettor wins based on the information provided by the expert, a small portion of the winnings goes to the expert.
Unique Key Features:
*Direct social interaction with other bettors and experts.
*Live streaming of matches.
*A skin pool where users can wager or win game skins.
Advisors and Bookrunners:
*Lionel Iruke & Empire Global Partners.
What are the risks?
*User Engagement — numbers are limited initially, but should grow over time.
*Conversions — communicating Phantasm’s USPs within the marketplace and converting traffic to users.
*Competition — well-established multi-million-dollar online betting companies such as William Hill and Pinnacle already dominate the marketplace.
Competitors:
*Pinaccle.
*William Hill.
*Thunderpick.
*GG.bet.
Management team:
*Mike Boutwell: CEO.
*Miroslav Istona: CTO.
The Hatchworks Team
Legal Disclaimer — This report summary has been generated as a result of Hatchworks’ proprietary company vetting and filtering system. The level of due diligence conducted on investible assets conducted ranges from mediocre to significant, the latter being the case where Hatchworks has explicitly taken strategic positions in. By no means is the information in this file to be relied on as investment advice; this includes Hatchworks’ algorithmic composite score known as ’Hatchscore’. You will note that this report does not include a ‘buy’, ‘sell’ or ‘hold’ recommendation. Hatchworks has not received any compensation for this research. For more information you can reach us at info@hatchworksvc.com. This report is not for distribution in the United States of America. It is closed to U.S citizens. If you are a U.S. citizen, you should delete this report or return to sender.
