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Blue Star Capital eyes new investment opportunities

Snapshot

  • Blue Star is a tech investor with stakes in e-payments, e-sports and micropayments
  • Recently invested into six e-sports franchises
  • Biggest holding is the stake in micropayments group SatoshiPay
Blue Star Capital - Blue Star Capital branches out into e-sports

Quick facts: Blue Star Capital PLC

Price: 0.1968 GBX

AIM:BLU
Market: AIM
Market Cap: £7.39 m
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What it does

Blue Star Capital PLC (LON:BLU) is to invest £150,000 each into six e-sports teams around the world.

These companies are based in the UK, India, the US, Singapore, Australia and Canada and participate in a variety of sports.

Blue Star said: "Each of the companies will create or acquire a competitive esports franchise to generate revenue from tournament winnings, digital marketing opportunities, sponsorship, membership, merchandise and promotional tours and events."

Micropayments platform SatoshiPay (Blue Star 27.9%) is currently valued at £4.6mln.

Biometrics payments provider Sthaler (1%) has developed the biometric Fingopay product, which is being trialled in Manchester, at certain universities and festivals.

In April, it invested £57,000 into Canadian mobile game group Leaf Capital.

How it's doing

SatoshiPay has just launched a joint venture with Axel Springer to enable readers to pay for the German publisher’s content using an e-wallet.

The company is also working on a cross-border payment system to allow companies instantly to transfer funds around the world.

Blue Star also has a small (0.9%) stake in Sthaler, which has developed Fingopay a widely lauded fingerprint recognition system that is currently on trial in Manchester and in Egypt.

The company raised £100,000 in April through a placing at 0.1p by Jonathan Bixby, who introduced the group’s esports investments to the company, while chairman Derek Lew invested an additional £17,500.

In early May, Blue Star raised £35,000 in order to make follow-on investments in its six esports teams, while later that month its portfolio firm, SatoshiPay, received support in the form of a strategic investment from its key partner, the Stellar Development Foundation.

The company in June raised an additional £500,000 in early June, a cash injection that chief executive Tony Fabrizi said would be used to provide working capital and investment funds “to allow us the flexibility to participate in future funding rounds of our portfolio companies during the remainder of the year”.

 

What the boss says: Tony Fabrizi

"Despite the traumatic impact of COVID-19 on all our lives, we are pleased with the overall performance of our portfolio companies and with the expansion of our portfolio through the investment in Leaf.

“The funds raised through the placing will also provide additional working capital to support the business during these uncertain times.”

 

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Inflexion points

  • Canadian entrepreneur David Lew has become chairman
  • SatoshiPay is expanding into the vast cross-border payments business
  • E-sports franchises become established as demand for virtual sports increases

 

What the broker says: Ed Stacey, Proactive Research

"A strong investment performance could potentially be repeated going forward and that this should increasingly translate into positive performance for the Blue Star share price.

Factors supporting this view include:

  • Zero debt on the balance sheet, and an improved basis for raising future capital to take advantage of opportunities that may arise.
  • Historic levels of administrative cost were sharply reduced when Tony Fabrizi became CEO, and remain low at around £350k.
  • A broadened pool of management expertise, bringing experience from private equity, corporate finance and media.
  • Positive track record for the current portfolio of assets.

"We argue that sustained performance could justify Blue Star shares trading at a premium to Net Asset Value.."

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