Team Go, formerly Gamers Origin, is one of the pioneering structures of French esports, launched in 2014.
Competing in League of Legends in the LFL and the women's circuit, Fortnite, Smash Bros, and until recently in Trackmania but like many other French structures on this game, the club announced the cessation of its esports activities.
Its operating model is unique and diversified, illustrated by a dual activity:
- Management of an esports club
- A production and communication agency
Concretely, alongside their esports activity, Team GO supports brands in their communication strategy around esports and more broadly gaming. The production/communication branch also ventures into events and activations, positioning itself as a privileged interlocutor for endemic and non-endemic brands in their marketing strategies.
After a historic fundraising round in 2018 of over €3,000,000, notably with the introduction of Entrepreneur Venture (15%) and PINOU Capital (11%) to its capital, the company then aimed to accelerate its growth.
The starting point for Guillaume Merlini's club (27%) during this fundraising round marked a turnover of €1,200,000, initially distributed as 50% of revenues from agency activity through event organization and 50% of esports revenues divided between sponsorship, cash prizes, merchandising, and commercial operations.
How is Team GO’s financial health now?
Some key figures over the last three years
At the close of 2022, the fruits of the fundraising are felt, as Team GO announces a 75% growth over its last three fiscal years, reporting an average turnover of €1,773,000 with a surge in 2021 of over €800,000.
In terms of profitability, balance could not be maintained, with an average EBITDA of -€679,000 over the last three years, meaning the company spends on average 140% of its turnover. However, we highlight a positive evolution of 42% of the indicator, suggesting a possibility of financial balance in the medium term.
The imbalance resulting from strong growth creates a negative net result, and at the last closing, the club accumulates a deficit of €2,340,000 over three years.
The financial structure of the club, initially stable, was shaken by this growth period, especially in the 2021 fiscal year when the level of equity reached -€791,000, resulting from two consecutive years of losses.
Refinancing was the preferred solution, bringing the total debt to €1,200,000 as of 31/12/2022, but the company still maintains standard debt norms (debt ratio of 1.28).
Finally, despite a significant evolution of cash flows of more than 90%, reaching €1,720,000, the working capital requirement is contained at less than one million euros, depicting good short-term financial management.
Lastly, the club indicates that during the year 2023, it "significantly accelerated" its agency activity, with similar prospects for 2024, allowing it to affirm that financial balance should be achieved by 2024.
Analysis Note:
Initially strong with its history as a "pioneer," Team GO has always been able to adapt through strong strategic choices, such as rebranding or, more recently, adjusting their presence in games.
Now, thanks to solid shareholding and the deployment of significant financial and structural resources, RedStorm envisions a model of short-term stability, particularly supported by their production and communication agency, serving as a growth relay for the club.
An hybrid model allowing for more serene financial development of its esports brand, which seems to be taking a marketing turn, notably thanks to significant efforts in audiovisual productions.
