SPORTSHERO (SHO)
Fellow HC Members. I believe I have located a true hidden gem on the ASX. I will detail a summary for you to have a read over. Bear in mind, the very very high profile investors and T20, which have quietly accumulated a sizeable stake and are currently keeping this their top secret. Some of the richest men in Asia are invested in this little gem. Not to mention a US$2b fund based in Asia. And also Samsung Venture Investment!! A recent strategic placement was completed with IPV for $1m worth of shares for $0.08. If they purchased on market, they would have stocked up into the 20's and 30's no doubt. I also suggest reading company announcements, as within lies a true gem of a stock, potential to 1000% gain without question. Please note, the below is a combination of my research and what has been publicly announced to the market. For more information, please DYOR.
What is Sportshero?
Sportshero is a sports gaming platform (app) that features a sports prediction program. Users enter the App and predict the scoring outcomes of Soccer and Cricket matches, with winners prevailing to win exciting prizes.
Who is Sportshero?
Sportshero is an Australian founded company, currently operating out of Singapore. Why Singapore? Because the target market is predominately Asia. I will cover more about the target market below.
What is their Aim?
The company's aim is to make partnership with multinational global affiliates, which will give access to a total audience size of 1Billion people in the world. More on the potential affiliates shortly. In the process, Sportshero aims to bring millions of sporting fans from around the world onto a platform which allows them to predict the scores and outcomes of their favourite matches. The incentive? They win really cool prizes. Imagine to a young soccer obsessed Indonesian kid (a soccer mad country), what it would be like to have a fully paid adventure of a lifetime trip to watch his favourite Team Manchester United play in the UEFA Champions League final in Ukraine. Flights, hotel, match tickets etc all paid for! Or to a young Indian kid, to receive a signed Sachin Tendulkar cricket bat and jersey and to win free tickets to the Cricket World Cup! Maybe in Australia, this does no mean that much as financially this is within reach for many, but in Asia is simply isn't.
Who is the Target Market?
The target market is the mobile gaming market, projected in 2017 to be a massive US$46.1Bn market, representing a 42% portion of the US$108.9Billion global gaming market. Bear in mind, that Asia Pacific is the biggest most game obsessed continent in the world. Most importantly, the company is focusing on countries such as Indonesia, Singapore, China, India, Thailand, Korea, Japan, and many more. There are plane from the company to enter the European and North American markets. Think Tennis, think NBA! The wonderful thing about this company is that it's platform can easily enter new markets. Indonesia alone has 204m soccer fans. They would have the chance to predict matches between Indonesian soccer teams, and of course other global teams.
How will they commercialise?
It all begins with partnerships, as the partners will give access to huge audiences, hence the 1 Billion target the comany has set. It appears the company has reached an audience of about 750million from my knowledge. Hence, one or two more partnerships will bring this to 1billion. More on the partnerships below.
The app features 3 revenue generation models:
1. Free 2 Play (advertising revenue from sports clubs, sports brands, airlines, electronic companies etc).
2. Pay 2 Play (one purchases tickets to compete, and when they win they receive coins in exchange which can be redeemed for prizes)
3. Pay to Follow (where one pays to follow the best prediction experts on the leaderboards). The top predictors will be promoted throughout the App and will help in the generation of new users and followers. This will assist other predictors to learn the secrets from the best. Think domino effect here.
Basically, think of the App as a virtual store, with multiple partners showcasing their products. Manchester United advertising their merchandise for sale, airlines marketing their flights, car brands marketing their cars, nike and adidas marketing their apparel, the list goes on and on.
When a user downloads the app, they are prompted to create an ewallet, which will have Sportshero coins.
Non traditional Revenue is the interesting part. Think data. What power that data holds and how much companies will be willing to spend to receive that data. I will not speculate on this topic, but just imagine the strength of that data for companies to understand user metrics, interests, etc etc. So so powerful.
What does the App do?
The App requires users to login and register. Once done, a user will browse through all the matches displayed on the App, which is live. You can scroll and predict the outcome of upcoming matches. Ranging from Liverpool vs Arsenal to India vs Australia. The users make predictions, and based on their wins will receive coins which can be traded for prizes. In addition, successful and highly skilled sports predictors can have people follow their predictions, and the more success someone predicts, the higher they rank in the leaders board. Once coins are accumulated they can be redeemed for prizes. Such as a pair of brand new nike soccer boots, or top quality cricket gear or bats.
How will they attract/retain users?
Attraction of users will come from the partners. The partners will bring the fans to the app. How? Social media feeds and other methods.
Competitions are held monthly and yearly which keeps the user returning regularly, alongside the day to day visiting of the app to follow news on injuries, team updates, key signings and training reports etc. This news will be fed through the partners that have signed agreements. So, daily users can go in and read articles from industry respected journalists. This info will be crucial to sports prediction. Monthly prizes will include things like a Playstation 4. Again, to the target market this is massive! As mentioned previously season long competition prizes will include the likes of Champions League finals Tickets.
Who are their competitors?
Yahoo Sports (1.3m users)
ESPN Fantasy (6.2m users)
Fanduel (4m users)
ESPN Cricinfo (10m users)
DraftKings (4m users)
FireFan (500k users)
As you can see, Sportshero has potential due to their partnerships and affiliates of easily surpassing by many many multiples. The model is far superior.
Who are some partners/affiliates?
These are partners that have signed agreements! No speculation here. See the announcements.
Ian Chappell is one. Obviously he is one of the games most respected commentators and legends. He rubs shoulders with the cricket elite. Shane Warne, Michael Clarke, Dhoni, Tendulkar etc.
90 Mins is another. They are huge! They are a soccer news website, with over 60million monthly users and combined community size of 500million.
YuuZoo the Singapore listed giant, have over 85 million users and 700 million TV viewers across 164 countries around the world.
Spartan has a community of over 92 million fans. Their brand ambassadors include Dhoni, Gayle, Clarke. The elite cricketers of the world.
The total community size reached so far by Sportshero is 750million at this stage I believe.
Global Expansion plans?
Yes. Absolutely they have global in their vision. Starting with Africa and Asia, the plan is to then rollout to North and South America. Target markets there include the NFL (american footbal), NBA (basketball), NHL (ice hockey) , and MLB (baseball). South America, well needless to say this is a soccer mad location. Think Brasilian soccer leagues, Argentina, Chile, Uruguay. etc etc.
Execution Plan?
The company have just finished and launched the App. The app is being used currently (look at reviews on app store and google play store - very highly rated). Now the app has been launched, the company is about to embark on its user acquisition phase.
Following user acquisition, the company plans to onboard more partnerships with brands that want to use the platform to sell their products - think Sony, Samsung, Chelsea, Liverpool, and airlines etc. As this occurs, the company will capture data of the users. Data is the new oil guys. Revenue will transition starting now and with more onbaroding of partnerships.
Corporate Structure/Info:
Shares on Issue: 226.341m (listed shares at 114m currently)
Share Price: $0.07
Market Cap (according to Commsec) $8m.
Key Investors:
MyHero 60m shares
IPV Capital (US$2b fund)
Samsung Venture
KPCB China
Michael Sampoera (tobacco tycoon. Sampoerna the most prominant tobacco brand in Indonesia)
T20 hold 70% of Shares on Issue. Very tightly held register.
Guys, with the above in mind, I must say I am extremely bullish on this little known gem. The market, once it catches on, will love this and the potential it has. The investors and T20 are world class. The concept is world class and has every ability to be the largest sports prediction app in the world. The company has not done marketing yet. This begins now, and with such heavy hitters already in, this is a price steal.
The company after the recent placement with IPV Capital is fully funded for at least 18months without earning a cent in revenue. IPV bought at $0.08 recently, so todays price of $0.07 represents a 12.5% discount to the placement price. Needless to say the amount of shares that IPV took would have had them buying on market at multiples higher SP. Buy Now. Hold. Enjoy the story. All IMO and GLTAH.
Here is a link to the most recent corporate presentation:
https://hotcopper.com.au/threads/ann-corporate-presentation.3679020/#.Wg0GWROCyT8
(20min delay)
