Sentinels

Where Champions Are Made
Overview
Raised: $146,858
Rolling Commitments ($USD)
Active
09/28/2023
34
979%
12%
$2,670
75
2023
Media, Entertainment & Publishing
GamingTech
B2C
High
Low
Summary Profit and Loss Statement
FY 2022 | FY 2021 | |
---|---|---|
Revenue |
$2,431,231 |
$1,490,085 |
COGS |
$507,930 |
$156,473 |
Tax |
$0 |
$0 |
| ||
| ||
Net Income |
$-8,209,501 |
$-6,398,614 |
Summary Balance Sheet
FY 2022 | FY 2021 | |
---|---|---|
Cash |
$185,221 |
$249,847 |
Accounts Receivable |
$362,105 |
$495,238 |
Total Assets |
$683,481 |
$752,089 |
Short-Term Debt |
$395,171 |
$278,298 |
Long-Term Debt |
$2,100,000 |
$2,850,000 |
Total Liabilities |
$2,495,171 |
$3,128,298 |
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Analyst Report
Synopsis
Esports is a rapidly growing industry that is expected to reach a market size of USD 3.5 billion by 2025. The industry's growth is fuelled by the increasing popularity of video games and the rise of online streaming platforms. In this context, Sentinels, an esports organization founded in 2018, has successfully built champion-caliber esports teams and amassed a large, enthusiastic fanbase.
Sentinels' business model revolves around generating revenue through various streams. These include sponsorship deals, merchandise sales, team share of prize money and digital goods, and participation payments. The company's strategy is to leverage its bold branding and marketing efforts and strong lineups to attract and retain a large fanbase. This approach has proven successful, as evidenced by the company's social media following, which numbers in the millions.
Sentinels is well-positioned to capitalize on this trend as the esports industry grows and further expands its operations. The company's current crowdfunding campaign on StartEngine aims to raise funds that will be used for players' and content creators' salaries, inventory, and content creation. This investment opportunity allows potential investors to participate in the growth of an exciting industry and contribute to the future success of Sentinels.
Price
Sentinels is raising funds on StartEngine at a valuation of $30.09 million. While Sentinels is a prominent esports organization with a strong fanbase and revenue growth, the valuation seems inflated. The revenue multiple of 12.38 is high for a media, entertainment, and publishing company. Additionally, Sentinels is still in the pre-profit stage, which raises concerns about its ability to generate sustainable earnings in the future.
Investors should also consider the competitive landscape of the global esports market. While Sentinels has established itself as a dominant force in North America, the market is highly competitive, with numerous other esports organizations vying for attention and sponsorship deals. This level of competition could impact Sentinels' ability to maintain its current growth trajectory and generate consistent revenue.
Furthermore, Sentinels is not backed by venture capital investors, which may raise questions about institutional investors' confidence level in the company's long-term prospects. Without notable investors or partnerships, Sentinels may face challenges in securing strategic alliances or accessing additional funding in the future.
Considering these factors, investors should cautiously approach Sentinels' valuation. While the company has shown promising revenue growth and has a strong presence in the esports industry, the current valuation appears to be higher. Investors should carefully assess the potential risks and rewards before making investment decisions.
Market
The Esports market has grown significantly in the past decade and is expected to continue its upward trajectory. The global Esports market size is expected to reach $3.96 billion by 2025, growing at a compound annual growth rate (CAGR) of 8.21%. The rise in Esports' popularity can be attributed to the growing global video gaming population, technological advancements, and increasing investment in the sector.
Sentinels operates in a highly competitive landscape with numerous established players. As an Esports organization, its main competitors would be other organizations that manage Esports teams, such as Cloud9, Team Liquid, and 100 Thieves. Despite this competition, Sentinels has established a strong presence in this market, as indicated by its significant social media following.
Furthermore, as Esports continues to gain mainstream acceptance, the market for merchandise and digital goods associated with Esports teams is also expected to grow. This presents further opportunities for revenue generation for Sentinels. Additionally, as Esports tournaments continue to offer larger prize pools, the team share of this prize money can represent a significant revenue stream for the company.
While there is a moderate level of competition in the Esports market, Sentinels appears to be well-positioned to capitalize on the growth in this sector. Its strong brand presence, multiple revenue streams, and large fanbase place it in an excellent position to achieve sustained growth in the coming years.
Team
Sentinels is led by its founder, Rob Moore, who serves as the CEO and CFO of the company. Moore has over five years of relevant industry experience. While he is a first-time founder, he brings high-level managerial skills to the organization. Moore is responsible for the overall strategic direction and financial management of Sentinels.
While the specific details about the rest of the team are unavailable, Sentinels currently has 23 team members. The team has been growing steadily, indicating the company's commitment to building a solid and capable workforce. However, the information provided does not mean the diversity of the team or the presence of complementary skills among its members.
Differentiation
Sentinels is an esports organization aiming to build champion-caliber teams and cultivate a large and passionate fanbase. While the company's differentiation level in terms of quality and price is considered low, it has established itself as a dominant force in the esports industry, particularly in North America. Sentinels have garnered a significant following across various social media platforms, with millions of followers.
Regarding competition, Sentinels faces numerous other esports organizations, many of which are also focused on building successful teams and engaging fanbases. While the competitive landscape is moderately competitive, Sentinels has established itself as a prominent figure in the esports industry.
Despite the low differentiation level, Sentinels' strong presence in North America and its ability to attract a large and enthusiastic fanbase provide a solid foundation for growth.
Overall, while Sentinels faces competition from other esports organizations, its established brand presence, revenue generation strategies, and dedicated fanbase contribute to its growth potential in the global esports market.
Performance
Sentinels has made significant strides in the esports industry since its founding in 2018. The company has established itself as a dominant force in North American esports, with a large and enthusiastic fanbase. Sentinels has leveraged its strong branding, marketing efforts, and champion-caliber esports teams to become a premier esports organization.
Regarding financial performance, Sentinels reported annual revenue of $2.4 million, representing a growth rate of 63.16% compared to the previous year. This growth demonstrates the company's ability to attract sponsors, sell merchandise, and generate revenue from its esports teams and fanbase.
While Sentinels has achieved significant revenue growth, it is important to note that the company has not yet reached profitability. Sentinels reported a monthly burn rate of $684,125.08, indicating that the company is investing heavily in its operations and growth initiatives.
Despite the esports industry's competitive landscape, Sentinels has established itself as a prominent player. The company's bold branding, strong social media presence, and successful esports teams have contributed to its success.
Overall, Sentinels' performance in the esports industry has been impressive, with strong revenue growth and a dedicated fanbase. However, investors should be aware of the company's ongoing investments and the competitive nature of the industry.
Risk
Sentinels, as an esports organization, operates in a highly competitive industry with other esports teams as its indirect competitors. While Sentinels has gained significant traction and a large fanbase, the esports landscape constantly evolves, and maintaining a competitive edge can be challenging. Additionally, the company heavily relies on sponsorship, merchandise sales, team share of prize money, and other revenue streams. Any decline in sponsorships, decrease in merchandise demand, or underperformance by its teams could negatively impact Sentinels' revenue and profitability.
Sentinels also faces financial risks, as indicated by its negative net income and significant long-term debt. The company's high monthly burn rate raises concerns about its ability to sustain operations and meet financial obligations. Furthermore, Sentinels is currently overvalued according to its valuation in the crowdfunding campaign. This could pose a risk to potential investors if the company fails to deliver on its growth projections or faces challenges in monetizing its fanbase.
While Sentinels has a strong market acceptance and a dedicated founder, the company's success relies heavily on the popularity of esports and the ability to attract and retain fans and sponsors continuously. Given the rapidly changing nature of the industry, there is a risk that Sentinels may struggle to adapt to evolving trends or new market entrants.
Overall, while Sentinels has demonstrated growth and success in building its brand and fanbase, potential investors should carefully consider the competitive landscape, financial risks, and the company's ability to sustain its current growth trajectory in the dynamic esports industry.
Bullish Outlook
Sentinels has established itself as a dominant force in the esports industry, particularly in North America. The company has successfully built champion-caliber esports teams and cultivated a massive and enthusiastic fanbase. With millions of followers across various social media platforms, Sentinels has become a powerful voice in esports.
The esports market has tremendous growth potential, and Sentinels is well-positioned to capitalize on this opportunity. The global esports market is expanding rapidly, attracting a large and dedicated audience.
Sentinels generates revenue through various streams, including sponsorship deals, merchandise sales, the team's share of prize money, digital goods, and participation payments. This diversified revenue model allows the company to generate consistent income and potentially unlock additional revenue streams in the future.
Despite being in the pre-profit stage, Sentinels have demonstrated impressive revenue growth. In its most recent fiscal year, the company generated $2.4 million in revenue, representing a remarkable growth rate of 63.16%. This strong revenue growth indicates Sentinels' ability to monetize its brand, teams, and fanbase effectively.
The competitive landscape in the esports industry is moderately competitive, but Sentinels has managed to differentiate itself through its strong branding and community engagement. While barriers to entry may be low, the company's established position and dedicated fanbase provide an advantage over potential competitors.
Overall, Sentinels' dominant presence in North American esports, strong revenue growth, and diverse revenue streams make it an attractive investment opportunity. As the esports industry continues to grow, Sentinels is well-positioned to capitalize on this trend and further solidify its position as a leading esports organization.
Bearish Outlook
While Sentinels has established itself as a prominent esports organization with a large fanbase, there are several concerns surrounding its financials. The company's valuation of $30.09 million appears to be inflated, considering its relatively low revenue of $2.43 million. With a revenue multiple of 12.38, Sentinels seems overvalued compared to its current financial performance. Investors should exercise caution when considering this investment opportunity.
Furthermore, Sentinels reported a net loss of $8.21 million in its most recent fiscal year. This significant loss raises questions about the company's ability to generate sustainable profits. Although esports is a rapidly growing industry, Sentinels' financials indicate that it has not yet found a profitable business model. The company heavily relies on sponsorships, merchandise sales, and team share of prize money and digital goods, which may not provide a stable and consistent revenue stream in the long term.
Sentinels also faces competition from other esports teams in the industry. While the competitive landscape is moderately competitive, Sentinels' ability to differentiate itself and maintain its market position remains uncertain. The low barriers to entry in the esports industry also raise concerns about the company's ability to sustain its growth and profitability over time.
Lastly, Sentinels' monthly burn rate of $684,125.08 suggests that it is consuming cash at a significant rate without generating sufficient revenue to cover its expenses. This highlights the company's reliance on external funding, such as crowdfunding campaigns, to sustain its operations. Investors should carefully evaluate the company's financial situation and ability to achieve profitability before making investment decisions.
Executive Summary
Sentinels is a premier esports organization building champion-level teams and a large, enthusiastic fanbase. Since its inception in 2018, Sentinels has become a dominant voice in esports across all social media platforms, with millions of followers. The company generates revenue through multiple streams, including sponsorship, merchandise, team share of prize money and digital goods, and participation payments. The organization's annual revenue is currently $2,431,231, with an annual revenue growth of 63.16%.
The esports market is increasing, and Sentinels is well-positioned to capitalize on this trend. However, the company is still in the pre-profit stage, with a net income of -$8,209,501 in the most recent fiscal year. The company also has a high monthly burn rate of $684,125.08. Despite these challenges, the company is dedicated to growth and seeks to raise funds to pay for player and content creator salaries, inventory, and content creation.
However, investors should be aware that Sentinels appears to be overvalued at its current pre-money valuation of $30.09 million. The company also operates in a moderately competitive market with low barriers to entry, which could pose challenges to its growth and profitability. Despite these concerns, the company's strong growth in followers and revenue indicates a positive trajectory for the future.
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