Read the 24-slide pitch deck that gaming startup Brag House used to raise $5 million as it prepares to go public
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- Esports startup Brag House raised $5 million in a series A round and plans to go public in the US.
- Its founders credit their pitch to VCs with helping them forge connections with bankers.
- The startup shared the full pitch deck with Insider, which is published in part below.
Two-year-old esports startup Brag House is preparing to go public in the US, and its founders credit their pitch to VCs during their latest fundraising round with helping them make ties with investment banks.
The startup, which pegs itself as a social platform for casual college gamers, closed in September a $5 million Series A round that was led by Nolan Bushnell and Ron Bauer’s Black Sheep Ventures.
Cofounder and CEO Lavell Juan told Insider that the company had only planned to raise a seed round of about £1 million ($1.35 million). It thought it would raise another £3 million ($4 million) later this year by going public on the London Stock Exchange.
But the intital fundraising round “blew past” expectations, Juan said.
Brag House was then approached after the Series A by the Nasdaq stock exchange and bankers, Juan said. The company plans to list on the Nasdaq, though it’s still early in that process.
The basic idea of Brag House is bringing the fandoms that exist around traditional college sports to esports. It plans to do that by attracting casual college gamers to its ecosystem, where they can have their gaming streams featured and go head-to-head with rival universities or groups.
Brag House also hosts tournaments and produces pre- and post-game commentary around them.
It’s not the only esports startup playing in this arena. EFuse, a startup that helps college esports teams recruit players, has a tournament service that it licenses to schools. Software startup PlayVS also organizes youth and collegiate gaming competitions.
Brag House borrows elements from sports betting, as well. Users can place “brags,” which is the company’s vernacular for making predictions on what will happen in a tournament or match, to win prizes.
The startup makes most of its money today from selling subscriptions and hosting tournaments. It also generates revenue from in-app purchases.
Juan told Insider that Brag House plans to use the funding to develop its product and user experience, and build out its sales and operational workforce.
The pitch deck says Brag House had about 2,180 members its first year, and aims to grow to roughly 3.6 million in three years.
Brag House shared the full pitch deck that it used during its Series A round with Insider. In the version published below, from November, the company redacted seven slides, all of which were viewed by Insider and mainly contained financial information.
Brag House describes itself as a “premier esports platform for casual college gamers and their fans.”
The startup strives to offer college gamers the experience of being a professional esports player, complete with tournaments, fully produced broadcasts, and engaged fans.
The company, which currently incorporates gamers’ Twitch streams into the platform, eventually wants to build its own streaming player as well.
Brag House’s investor tagline, which was in the original pitch deck from August, is “the first vertically integrated social network for college esports.” Juan said “vertically integrated” appeals to investors, but the tagline above is simpler.
The deck includes a standard disclaimer about the financial information presented in the slides.
The original deck from August, which Insider has viewed, contains revenue projections for Brag House for 2020 and the next five years.
Brag House said it was advised by counsel to redact that information in the version published by Insider.
The company says esports are big for college students.
The deck sets up college students’ interest in esports. It pegs gaming as the next “big thing” after traditional sports.
The app asks users to identify their university when they sign up.
But most college gamers can’t participate in esports, the deck says.
Brag House told Insider that the average college esports program is limited to seven to ten players, at most.
Casual gamers at the school, who may already be streaming themselves on Twitch or other livestreaming platforms, are left to spectate.
And it says there’s little brand affinity today for college esports teams, whose audiences are spread across livestreaming platforms like Twitch, Instagram, and Discord.
Brag House hopes to change that.
Brag House introduces its mission and founders, and touts partners like Coca-Cola.
The startup reiterates its mission to build a community of casual college gamers.
Brag House was founded in 2020 by Lavell Juan, a former corporate lawyer who serves as CEO, and Daniel Leibovich, formerly of the Israeli Defense Forces, who is operating chief.
Will Simpson was also brought in in July 2020 as cofounder and chief technology officer.
The compay also teases brand partnerships with Coca-Cola and McDonald’s, which it worked with on July 2021 event.
And it highlights its milestones as a startup.
Juan and Leibovich came up in 2019 with the idea for a community that would combine college and esports.
Brag House officially launched in 2020, with a March Madness tournament. It boasted that year that about 30% of its audience had subscribed to the service.
The following year, Brag House snagged corporate partners including Coca-Cola and McDonald’s for its “Super Smash Bros. Ultimate” tournament with 10 Texas colleges.
The startup says it hopes to use existing college rivalries to fuel engagement.
Brag House wants to tap into the fandoms that exist around traditional college sports, like football and basketball, and create a similar experience for esports.
It introduces its platform, which has both free and paid tiers as well as in-app purchases.
College gamers can sign up to have their gaming streams featured within the app, or simply sign up to watch streams from other gamers.
The platform produces tournaments and competitions, complete with pre-game and post-game commentary, and a live chat.
An example portrays a head-to-head match up between two fraternities at a university.
It says it centralizes “competitions, full-scale production, risk-free wagering, and social engagement.”
It quotes fans who praised the “smack talk” and “rivalry” on the platform.
Brag House bills itself as a place for both college gamers and fans.
Gamers can sign-up through Brag House’s website to have their gaming streams featured in the platform. The company currently requires gamers to include a college email address when they sign up.
But fans can also sign up for the app to spectate.
Brag House counts companies including Barstool Sports, PlayVS, and DraftKings among its competitors.
The startup says it platform has elements of each of these companies, such as Barstool’s focus on the collegiate market and PlayVS’s focus on college and youth esports.
It also has a free wagering component. Users can make predictions, called “brags” in the app, about tournaments and match ups. During a tournament, for example, users could place brags on how many matches will end in a certain amount of time. Winners earn “brag bucks,” the company’s in-house currency, which they can use to place more brags. Or they may win prizes from sponsors, like McDonald’s.
The startup highlights a selection of industry stats that are based on its own internal market research.
The startup doesn’t detail the methodology behind these stats. But it says the global esports market is worth $1 billion and the mobile gaming industry is worth $77 billion.
The US, where Brag House is currently focused on growing its audience and operations, makes up about 20% of both those markets, the startup estimates.
For comparison, though not apples to apples, Insider’s research arm Insider Intelligence, estimated that there will be 26.6 million monthly esports viewers in 2021, up 11.4% from 2020. It also estimated there will be more than 150 million monthly mobile gamers in the US, amounting to over 89% of all digital gamers.
Then the startup breaks down its business model.
Brag House told Insider that it brings in most of its revenue today from subscriptions, which start at $3 per month, and tournaments, which it sells sponsorships and brand partnership deals around.
The subscriptions grant users perks like extra monthly Brag Bucks, the platform’s in-app currency, and bigger prizes when they win brags.
The company said in-app purchases could become it largest revenue stream in the future. Users in the app can buy Brag Bucks, which they can use to place brags or access other features within the app.
Brag House says 30% of its customers converted to paying subscribers when it launched it subscription tier.
The company also said that it had about 2,180 users last year, and that most of its growth has been organic.
Juan, the CEO, said that one of Brag House’s biggest marketing tools is it university ambassador program. It works with a handful of athletes at different universities, who are also gamers, to test the market and ask them what they’d like to see in a platform like Brag House. Working with the students, who have gotten approval from the NCAA to participate, has also become a recruiting tool for the service.
The company’s growth plan includes building out its network of universities and its user base.
Brag House aims over the next two to three years to expand its pool of universities from 26 to 2,400, which would be more than half the number of colleges and universities in the US.
Juan told Insider that colleges started reaching out to Brag House after it began hosting tournaments with college students. The universities were looking for ways to engage the students through esports and events. It hosted, for instance, a tailgate with the University of Texas at Dallas.
The deck says the company is in partnership talks with the Alabama Crimson Tide athletics program, Oregon State University, and the University of Tennessee, Knoxville.
Brag House hosted in July an esports tournament with 10 Texas colleges.
The startup says it hosted, in July, 10 Texas-based universities during its Super Smash Bros. tournament, which it called the Texas Loyalty Cup.
Coca-Cola and McDonald’s also partnered with the event, offering prizes to students who won “brags,” or free wagers within the app.
The startup ultimately wants to tap into the broader fandoms around university athletics.
While college students are Brag House’s main focus right now, the startup wants to bring university alumni and fans into its ecosystem, too. The NCAA’s March Madness has successfully cultivated those audiences with other sports.
Brag House also wants to build out its content and media platform around esports. The company currently produces its competitions, as well as pre- and post-game commentary that is designed to give amateur gamers the experience of going pro.
It compares itself to some of the biggest names in esports, including Twitch.
It spotlights other esports companies and niche social networks that have delivered for investors, including esports streaming platforms Twitch and Caffeine, tech provider Vindex, and music-discovery platform 8tracks.
Brag House estimates, for instance, that Twitch had annual recurring revenue of $21.9 million in 2014, when it was acquired by Amazon for $970 million.
For itself, the company estimates it’ll generate $50 million in annual recurring revenue by its third year, which would be 2023.
The startup’s cofounder and CEO was a former collegiate athlete and corporate lawyer.
Juan, the cofounder and CEO, found his passion for gaming after he tore his Achilles heel and had to give up his varsity baseball career.
The former collegiate athlete told Insider that gaming became a way to connect to sports again.
Juan went on to become a corporate lawyer. He spent eight years at Weil, Gotshal & Manges LLP, where he advised financial companies, before pivoting to the startup world.
He previously founded and sold 7 Sportinghouse, a financial platform that helped NFL rookies access investment opportunities and brand partnerships.
Its operating chief served in the Israeli Defense Forces.
Cofounder and operating chief Daniel Leibovich served for four years in the operations branch of the Israeli Defense Forces.
Like Juan, he’s also a former youth athlete who describes himself as an “avid gamer.”
Leibovich worked at New York-based real-estate firms and a few startups before cofounding Brag House.
Its technology chief is a gamer and former Accenture consultant.
Will Simpson, a former Accenture staffer, joined Brag House in July 2020 as cofounder and chief technology officer.
The University of Florida alum is starting to build out small a tech team in Florida, where he still has ties.
And its strategy and financial chief has a background in investment banking, private equity, and equities trading.
Joseph Prososki, the chief strategy officer and acting CFO, worked at firms including the Utah-based Clearstone Associates and Sparrow Fund Management, before Brag House.
The startup’s advisors include a former NFL player and a former McDonald’s marketing exec.
Brag House advisors include:
- Freddie Adler, an investment manager at SellerX, who was formerly with the VC firm Antler
- Peter Fong, a longtime leader in the auto industry, who is revenue chief at Orbee
- Davon Morgan, a former NFL player, who is an assistant football coach at Emory & Henry College in Virginia
- Delu Jackson, ADT’s chief marketing officer, who previously held senior digital roles at Conagra, Kellogg, McDonald’s, and Nissan
The company is majority owned by founders and management.
Together, founders and management own 55.7% of the shares in Brag House.
Brag House is headquartered in London but is run out of New York.
Brag House is mostly run out of Brooklyn, New York, and has staff in Florida, where its technology chief has ties.
The company’s headquarters are in London, where one of its investors is based.
London also sets the stage for Brag House’s international expansion. Juan told Insider that Barg House is planning an upcoming event that would target gamers is at UK-based universities.