Kambi Group Buys iGaming B2B Developer Shape Games for $39M
Posted on: September 13, 2022, 12:33h.
Last updated on: September 13, 2022, 03:18h.
Sweden-based Kambi Group is buying Shape Games, a business-to-business platform and service provider for the iGaming industry, for an initial upfront consideration of €38.5 million (US$39 million).
Shape Games is headquartered in Copenhagen but has offices in Barcelona and Latvia. The technology firm specializes in helping iGaming platforms, and online sportsbooks better retain and engage their customers. The company’s primary offering is its “Customer Engagement Platform,” a business-to-business turnkey solution that delivers players an array of atypical features.
A sportsbook incorporating Shape Games’ platform into its app allows bettors to stream up to six events simultaneously, peruse the latest sports and gaming news, and set user shortcuts for favorite teams and athletes.
Shape additionally offers its contracted iGaming and/or internet sportsbooks a “Customer Engagement Suite” that adds a layer of social features, personal usage insights, and user rewards to the mobile gaming experience.
“I’ve always been clear on our intention to acquire technology and talent that will complement and enhance our sportsbook proposition, and I have no doubt Shape Games will do just that,” said Kambi co-founder and CEO Kristian Nylen.
Shape customers include US casino operator JACK Entertainment, BetWarrior, an online sportsbook operator in South Africa, and Denmark mobile lottery and betting firms Danske Spil and Norsk Tipping.
Shape Games reported 2021 revenue of €7.6 million, with earnings before interest, tax, depreciation, and amortization (EBITDA) at €2.8 million. Shape Games says it experienced 100% year-on-year growth in 2022.
US Market Fuels Purchase
Kambi Group says Shape Games’ front-end technology will strengthen the company’s existing sportsbook and iGaming products. The implementation is expected to “significantly enhance” Kambi’s own B2B offerings in the mobile gaming space.
Nylen explained that the acquisition is because of the growing demand from operators for uniqueness in the crowded industry. Nylen says operators in the US, where legal, regulated iGaming and online sports betting is relatively new, are particularly focused on differentiating their platforms from their competitors.
Chris Risom, CEO of Shape Games, agrees that operators in the US will drive the future of the online sports betting market.
The world of online sports betting is changing. In the future, it will be the US market that drives innovation for a large part. The US is also a mobile-first market, which is perfect for our solution,” Risom said.
“Kambi is already a very successful player in the US market, with many deals, including an existing shared customer [JACK Entertainment],” Risom added.
Kambi Group works with leading US sportsbook leaders, such as Penn Entertainment’s Barstool Sportsbook, Rush Street Gaming’s BetRivers, DraftKings, JACK, and Parx Casino.
Acquisition is Cost-Performance Based
If Shape Games’ installation to Kambi’s current platforms indeed increases fan engagement and better retains players, the final acquisition price could balloon considerably.
Kambi says its Shape takeover includes a “performance-related earnout of up to €39.6 million.” That would take the final acquisition cost to a total consideration of €78.1 million (US$79 million). The purchase is an all-cash deal.
Specific terms and how the performance premium will be determined were not disclosed.
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