Skillz CEO: Going public via SPAC is just one step in becoming a ‘hundred-year company’

San Francisco-based mobile games platform Skillz has seen its growth surge since its founding in 2012. And now it’s aiming to become a hundred-year company with mobile gaming market at its core.

That’s according to Skillz founder and CEO Andrew Paradise, who appeared on CNBC’s “Squawk on the Street” to discuss the company’s plans to go public with a SPAC, merging with Flying Eagle Acquisition.

“Our vision is to build a hundred-year company, and we were planning on being ready to go public at end of Q4,” Paradise, who will remain CEO of Skillz, told CNBC. “The SPAC route allows us to go to market a little bit faster, and it also allows us to select the best financial partners through the PIPE that we set up.”

Skillz, which hosts and operates tournaments for thousands of game developers, reportedly has over 40 million users on its platform. The company says it’s also on track to host over two billion amateur esports tournaments in 2020, facilitating over $1.6 billion in paid entry fees for games on the platform.

The deal values Skillz at $3.5 billion — about 15.5 times its projected 2020 revenue of $225 million — and would make it the first mobile e-sports platform to go public. The company generated $103 million in sales during the first six months of the year, with annualized revenue growth of 111% in the second quarter.

The company is not profitable, and projects it will lose $47 million this year on an adjusted EBITDA basis, not including stock-based compensation and one-time expenses. It declined to share more detailed metrics about its profitability, but said it expects adjusted EBITDA to turn positive in 2022.

In 2019, Paradise noted to CNBC that Skillz users spend more minutes per day on the platform on average than Netflix or Facebook users.

This speaks to the rapid growth of the mobile gaming market. While the games industry could generate almost $160 billion worldwide in 2020, mobile gaming has seen the biggest growth during lockdowns due to COVID, according to research firm Newzoo. The mobile games market is also on track to account for almost half of the gaming industry’s revenue this year, with projections that the sector could become a $150 billion market in 2025 (according to Newzoo and GlobalData).

Paradise emphasized that growth of Skillz, which had seen a consistent uptick even before imposed lockdowns due to the COVID pandemic, is simply an indicator of just how much more the mobile games market can expand.

“Mobile gaming is interactive content built for interactive devices, and that’s why it’s the future of entertainment,” he said.

Skillz has appeared on CNBC’s Disruptor 50 list twice, first in 2017 and then again in 2019. It will be the first Disruptor 50 company to go public through a SPAC.

Investors led by Wellington, Fidelity, Franklin Templeton and Neuberger Berman also committed $159 million in funding, with existing Skillz stockholders and Flying Eagle agreeing to a 24-month lockup. The deal is led by the same Flying Eagle executives who brought sports betting company DraftKings public earlier this year.