High Stakes : FNATIC, a 40 Million Adventure




15/10/2023 - 5'

Income, but more importantly, losses

At the end of their 2022 fiscal year, Fnatic has accumulated a deficit of more than 43 million euros.

Some may remember that Sam Mathews recently announced on X/Twitter that it's important to consider all the group's entities before drawing any conclusions.

That's why today we will analyze the financial report of the Fnatic holding company.

The year seemed promising for Fnatic, with rising sponsorship revenues and earnings generated by their esports activities.

But despite a significant increase in their turnover, reaching twenty million euros, up by more than 3 million euros (making Fnatic one of the structures with the highest revenues in the global esports scene), it's not enough for the company led by Sam Mathews to offset the explosion of expenses.

For 2022, there is a net loss of 7.71 million euros.

28 million euros is the cost of running this esports juggernaut, with over 11 million in payroll alone.

That's over 1 million in additional losses compared to their last closure. Fnatic is growing, generating new revenue, but cannot achieve the sought-after financial balance.

The auditor also explains that Fnatic announces having prepared a continuity plan for their operations, with financial cash flow forecasts prepared up until 12/31/2024. Practically, it is considered:

  • One or several rounds of fundraising
  • Delaying the hiring of staff
  • The sale of certain assets (in case the company fails to secure sufficient fundraising)
  • Contributions by existing shareholders

As of now, the UK-based company reports a remaining cash of 3.46 million euros, enough to cover almost two months of operation.

Like many of its peers in the industry, the company is developing different sources of revenue and managing to maintain competitiveness in sports but faces the same challenges:

  • How to find a minimally balanced model to avoid continuous refinancing, often associated with capital sharing?

The holding encompasses the 6 companies of the group, such as Gear dedicated to gaming equipment, or Fnatic business services located in Serbia, whose activities remain undisclosed for the time being.

(Sources : Audit Report of SANNPA Ltd on Gov.UK)

- Dymey -