Chinese esports giant Versus Programming Network (VSPN) is reviewing a potential initial public offering in the US.
Bloomberg has stated that the IPO might happen as early as 2021. It’s speculated that it’ll raise several hundred million dollars.
Details for this process are few and far between. But, here’s what we know about it so far.
Who is VSPN, and what is their impact on esports
VSPN is the most well-known Asian esports company.
Its headquarters are based in Shanghai. VSPN, or Xi’an Quantum Sports Management Co, was founded back in 2016. They have offices all over the world, from Indonesia to the US and Saudi Arabia.
When it comes to creating content and organizing esports tournaments, VSPN amassed 165 billion yuan (equivalent to $26 billion) in revenue last year.
VSPN is known for its tournament organization, featuring games like PlayerUnknown’s Battlegrounds, Honor Of Kings, and Clash Royale. They are also the ones responsible for The International 2019 Dota 2 event that was held in Shanghai.
Last year, VSPN built the V.SPACE, a 1,503 sq mt arena based in Seoul. The arena meets the requirements for esports tournaments, so we’ll surely hear more about it this year.
But why did VSPN decide to expand to the US market?
Why are they interested in an IPO in the US?
Before we take a look at why VSPN is interested in an IPO in the USA, let’s check out what an IPO is.
Simply put, an IPO is a phase when a company transitions from private to public. During this phase, the corporation offers its shares to the public through stocks.
The IPO is significant to private investors. When the public gets access to the corporation, the real gains of that company become evident. Plus, public investors can take part in that offering.
So why would VSPN do this? Well, if the rumors are true, the private investors of the company will be able to get the returns from their investments. And the US investors will also be able to invest in this tremendous opportunity.
How will this affect the market?
How can this impact on competing in the market?
An IPO in the US will be a massive leap for VSPN, as it has been for companies that have tons of investing money. Just ask the MPL, EnthusiastGaming, TGS, or eFuse.
While VSPN isn’t a monopoly, their growth ability puts them at an advantage against the competition. These are just some of the benefits that they will possess in the esports market:
- VSPN will get investments from the majority of investors (public investors), thus raising more capital.
- Easier share conversions since the value are publicly established.
- More transparent, as they’ll have to make financial reports every quarter, leading to better credit borrowing terms.
- VSPN can also raise more funds through secondary offerings since they’ll already be in public markets.
- Public companies can offer stocks to employees and executives, thus improving their management and attracting better-skilled employees.
- VSPN will gain publicity and an excellent reputation, which can increase their sales and profits.
- IPOs generally lower the cost of capital for debt and equity.