Deal focus: Gamurs gears up for M&A boom
Gamurs claims to have carved a niche as the largest gaming news publisher in the English-speaking world on the back of 39 acquisitions in seven years. Its Series A will go towards more purchases
Few start-ups can claim to have turned profitable before their Series A round. Gamurs, a Sydney-headquartered media company specialising in gaming, e-sports, and entertainment, achieved this landmark in October 2019, within three years of launch. This explains why investors were so keen for a piece of the business and why Gamurs declined to grasp every dollar within its reach.
“We were 2x oversubscribed but our profitability is now doubling every year and we wanted Series A investors that were aligned with us not taking on more capital than we needed,” said Riad Chikhani, the company’s founder and CEO. “We also wanted an investor base in the US because 50% of our audience and 80% of our revenue is in the US.”
The Series A, which recently closed on USD 12m, was led by US-based Elysian Park Ventures (EPV) and Cerro Capital. Other participants included a third US investor, Powerhouse Capital, and two local VCs, Aura Ventures and Artesian, which have backed Gamurs since 2015 and 2017, respectively.
Gamurs has raised about USD 19m since inception, but the Series A is significant in placing the start-up in the crosshairs of leading global investors in its field. EPV, Cerro, and Powerhouse are all specialists in sports, media, and entertainment. EPV has a direct connection with mainstream sport, having been established by the owners of the Los Angeles Dodgers Major League Baseball franchise.
“Esports, gaming, and entertainment are growing so rapidly,” Chikhani added. “There is no dominant player in the market, and we have the opportunity to be that dominant player, given our profitability and our ability to grow and maintain profitability.”
Early mover
Chikhani cut his teeth as a start-up founder at the tender age of 14, establishing an online community for RuneScape, a massively multiplayer online role-playing game (MMORPG) set in a medieval fantasy world. He sold it three years later when leaving high school.
Gamurs emerged in early 2015 as a collaborative endeavour with a group of friends at the University of New South Wales, where Chikhani studied computer science. They envisioned the company as a Facebook for gamers and won a place – plus seeding funding – in the Slingshot Accelerator programme. When the social network failed to go viral, the founders decided to pivot.
Researching the nascent esports industry, they discovered that there were 250m viewers globally but no comprehensive content offering to serve this audience. Half of those viewers were in China, so the Gamurs team decided to target the remaining 125m, reasoning that a majority were based in English-speaking jurisdictions.
“We went on Twitch and saw there was a Counterstrike tournament with 90,000 real-time viewers, but we found barely any news about it online,” said Chikhani. “It was like stumbling across the NBA or NFL and discovering there’s no ESPN or Bleacher Report. That was the lightbulb moment.”
The company acquired three micro publishers and combined them into a single entity, which formally launched in early 2016. Over the ensuing months, the number of monthly active users (MAUs) grew from 100,000 to 300,000. A turning point came with the acquisition of Dot Esports at the end of the same year and the opening of a second office in Austin, Texas.
“We merged the original content offering into Dot Esports and that became our flagship platform in 2017. That’s when the business exploded and we got a lot of traffic,” said Chikhani.
“We also brought in our chief content officer and vice president of audience development, and we established the M&A process we use today. We were a small team trying to make something work and these professionals joined us and helped the company level up.”
Attractive demographics
Gamurs now has 16 publications and 55m MAUs. This portfolio is largely the product of 39 acquisitions, including publications, social media accounts, and YouTube channels. Targets are typically small-scale, individually owned platforms. The Gamurs proposition is that it can help them achieve scale in an efficient manner through cost synergies and shared expertise.
The acquisition and integration process has become relatively seamless – regardless of size, targets are asset-light and user metrics are standardised. In purchasing Pro Game Guides and We Got This Covered in 2020 and 2021, respectively, Gamurs added 21m users in one fell swoop. It also quickly grew headcount across the two platforms from 10 to around 100, including freelancers.
We Got This Covered helped the company establish a footprint in the broader entertainment space – encompassing film, television, and comics – to complement the existing gaming and esports offering. Of the 16 publications, 12 are for gaming, two for esports, and two for entertainment. Expansion into Latin America and Asia is being contemplated, but Gamurs will stay within those verticals.
“Our core demographic is 18-34-year-old males in English-speaking countries. This is one of the hardest to reach audiences because they are consuming content very differently to what traditional media companies have been acquiring,” said Chikhani.
This demographic is catnip to brands like McDonald's, Red Bull, and Nintendo. Most of Gamurs’ revenue comes from advertising services such as strategic sponsorships, digital media buying, bespoke content creation and campaign solutions, and product partnerships.
Chikhani believes there will be considerable crossover between esports and traditional sports and between different media offerings. Given the industry’s speed of growth and relative immaturity, he is reluctant to plot a definitive evolutionary path. Moreover, the Series A investors were attracted by the efficiency of the Gamurs business model as much as by the market opportunity.
“They are huge fans of the roll-up strategy – using shared resources to drive costs down and operational efficiency to improve output and performance,” he said. “That’s how we have become profitable in such a competitive market with so many things going on.”
More on Australasia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.