Following on from their first tranche of funding round where the company announced that it had raised $3,878,224 in Canadian Dollars earlier on in the month, Luckbox has announced the second tranche of funding round has now expired with a further $627,650 in Canadian Dollars raised.
That means over $4.5 million in Canadian Dollars has been raised ahead of Luckbox’s planned flotation on the Toronto Venture Exchange, going through Elephant Hill, a company whom Luckbox signed a letter of intent with back in May.
It is good news for investors and Luckbox, who had expected to land a target of raising between $2 million and $3 million in Canadian Dollars from the funding rounds.
Speaking about the hugely positive investment in the company, the new Luckbox chief executive Quentin Martin, who only took on the role from Lars Lien in February, commented:
“Esports has been one of the few industries to thrive during the Covid-19 outbreak and its enormous potential has been brought into sharper focus.”
“Investors have clearly taken note and their support for us puts us in an even stronger position to accelerate our growth plans.”
The money raised through the funding rounds will be used for working capital and general corporate expenses ahead of the Luckbox merger with Elephant Hill, which will then facilitate the new company’s flotation on the TSX Venture exchange.
The move will see the current directors of Elephant Hill resign their posts with a new team of five directors jointly appointed by Elephant Hill and Luckbox.
“Oversubscribed subscription offering”
The president and chief executive of Elephant Hill commented on the news:
“As evidenced by the oversubscribed subscription receipts offering, we continue to be enthusiastic about our proposed business combination with Luckbox.”
“The esports market continues to expand with each passing month and Luckbox is positioned to be one of the leading esports betting companies in an exciting growth industry.”
Word of caution
Although Luckbox has seen a massive increase in total bets of 500% during the Covid-19 pandemic, which has seen their key performance indicators, according to Quentin Martin, go “through the roof” there are those issuing some words of caution for the company and investors.
Some in the industry have cautioned against over-pricing the value of Luckbox shares in the Covid-19 pandemic, where circumstances could well have over-inflated the value of those shares at the present time, but as and when traditional sports return and betting on those starts to pick up, there is a possibility for these shares to be devalued.
Whether or not that is a viable argument remains to be seen, but there is no coincidence that the rise in esports betting, which has largely been reported across the board by those involved in the esports industry, has been timed with the decline in betting available on traditional sports due to the pandemic.
However, as esports industry insiders know, the esports industry is buoyant at the moment and with the release of new games, such as Valorant, Overwatch 2 and increasing interest in the industry from third-party companies, this still looks like being a very wise and potentially profitable move from Luckbox.