Investing in a Series A capital raising, including Moneyball Australia Pty Limited (Moneyball) is subject to a range of risks. These include lack of liquidity, the potential for your investment to be diluted through additional capital raisings and the risk that you lose your entire investment. Moneyball has no immediate plans to IPO the company, therefore the likely investment horizon should be considered medium to long-term.
We recommend that you seek independent professional advice as to whether an investment in the Company is appropriate for your financial objectives, situation and needs. Who is Moneyball?
Moneyball Australia Pty Ltd is a privately owned daily fantasy sports (DFS) wagering platform comprising Moneyball.com.au (Australia) and Moneyball9.com (India). In March 2015, Moneyball launched Australia’s first DFS offering and currently has over 37,500 players. After only 6 months in operation Moneyball9 has become the second largest DFS platform in India with over 110,000 players.
In the three months to March 2017, Moneyball generated revenues of c$275k, and is forecasting full year revenues for FY2017 of $798k. What is Daily Fantasy Sports?
DFS is the fastest growing gaming segment globally and is for the sports enthusiast, where customers compete for cash prizes against other customers. Customers pay an entry fee to enter daily contests, with each contest comprising sporting events including NBA, NFL, AFL, NRL, Cricket, MLB, EPL and A-League. Customers select their team from the players involved in a day of sporting fixtures, as the real life sporting fixture is underway, selected players earn points for their on-field performance. Once that particular game is concluded, those customers who selected the best performing players win cash prizes.
In the United States, the DFS market is dominated by Fanduel and Draftkings, who’s combined revenues topped US$280m in 2015, and are expected to reach $800m in 2020. Moneyball’s target markets
Moneyball is currently focussed on the Australian and Indian markets. The fantasy sports market in Australia is estimated to have up to 1.65m active players, with competing platforms requiring customers to play confusing, season long commitments, for no money. Moneyball aims to transition a portion of this market to its daily and weekly pay to play prize pool contests, and is targeting c110,000 active players by June 2021.
Moneyball is also focussed on developing their leading position in India. Indian gambling market is estimated at US$60B per year, half of which is illegal. Lotteries and online rummy are however legal and rummy has created a strong online presence in recent years. Like rummy, DFS is considered to be a game of skill and is therefore legal to operate in that market. Moneyball anticipates growing to 1.6 million customers in India by June 2021.
The company also sees significant opportunity to enter the Asian markets. With EPL, NBA and F1 in particular extremely well supported, and a large internet population, Moneyball will utilise the same marketing techniques that have succeeded in Australia and India to reach these audiences. With no significant competitor of note, Moneyball feels that its ‘play money’ platform will address the DFS needs of this sports loving, huge addressable market. Track record
Since launching in March 2015, Moneyball has experienced over 50-70% YoY revenue growth, and currently has monthly revenue of approximately $100k across the Australian and Indian markets. Over the past 12 months in Australia, Moneyball has seen a 31% YoY increase in spend per active player and a 54% YoY increase in total line-ups per active player.
Active players = players that have actively played lineups over the last 13 months Revenue
Moneyball generates revenue through its ‘rake’ process, a clip of an average 11.5% of all player gaming entry fees. Rake is generated using two methods: Method One:
Moneyball offers its popular guaranteed prize pool contests, where its rake is on average 13-14% of all entry fees. Method Two:
Moneyball’s standard contests (not guaranteed) generate a flat rake of 10%.
Moneyball also plans to introduce ‘play money’ contests designed to keep casual players engaged. Monetisation will occur by enabling players to ‘top up’ play money, paying real cash to buy credits to keep playing in a free environment. Offer details
Moneyball is seeking to raise $1 million - $1.5 million which will provide the capital to actively chase new, more engaged and active Australian DFS platform users, enable them to continue to secure a leading position in India while the market is in its infancy, and introduce this unique DFS proposition to an exciting new market in Asia.
Phoenix Development Fund Limited, a Sydney based venture capital firm, has agreed to subscribe for $500,000 by underwriting a portion of the rights issue. This is subject to Moneyball securing a further $500,000 from existing investors or external parties and that all Noteholders agree to convert their notes at the offer price. Investing in Moneyball Australia Pty Ltd is subject to a range of risks. Please ensure you read the Amended and Restated Shareholders’ Deed and External Offer documentation. You acknowledge that all information has been provided to you by Moneyball and OnMarket BookBuilds has not conducted due diligence on the Company, and makes no warranty or representation as to the accuracy or completeness of the information provided. We recommend that you seek independent professional advice as to whether an investment in the Company is appropriate for your financial objectives, situation and needs.
Section 708 disclosure: The issuer of the securities is Moneyball Australia Pty Limited ACN 602 340 901. The securities to be issued are ordinary shares. The information provided on the OnMarket website has been prepared by Moneyball Australia, and OnMarket makes no representation as to its accuracy or completeness. No prospectus has been prepared and accordingly, the Offer is being made to sophisticated, experienced and professional investors only. It is a condition of the offer that applicants sign a Subscription Agreement and Deed of Accession to the Company’s Shareholders Deed, substantially in the form provided.
The Company reserves the right to close the offer early.
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