Sentinels CEO Rob Moore has quashed the notion that the organization is at risk of closing down, stressing that the company is on a path that could “soon” lead to profitability.
An offering letter submitted by Sentinels to the U.S. Securities and Exchange Commission earlier this month revealed that, even if the organization reached the target goal of raising $1.23 million through its crowdfunding campaign, it would require additional investment to continue to operate beyond a four-to-five-month window.
Sentinels added that it would only be able to operate for two to three months if it only raised the campaign’s minimum target ($14,997.15) and if it was unable to raise “additional capital through either existing shareholders or other outside sources of financing”.
Those two scenarios, coupled with the reveal that Sentinels spends almost $700,000 a month in salaries for players, creators, and staff, and merchandise inventory, have come under intense scrutiny as the industry goes through what is often referred to as the “esports winter”, with many companies cutting costs or simply closing their doors.
The response to the offering letter prompted Rob Moore to address concerns about Sentinels’ future. “It is a little funny that, in an 80-page document, one sentence in that document has become the exciting element of Twitter this morning,” he said in an interview with George Geddes.
Moore added that Sentinels has “raised capital internally” and that the investment group behind the company is “very committed” to the strategy in place.
“The intention is that we will continue to provide funding for the operation,” Moore insisted.
Sentinels could reach profitability “soon”
Moore explained that Sentinels gained momentum and reached a critical stage in its development as a company when its Valorant team became an international sensation in 2021. That year, Sentinels won VCT Stage 2 Masters Reykjavík and finished top 8 at VCT Stage 3 Masters Berlin and top 12 at Valorant Champions.
According to Moore, that was when Sentinels made the decision to “make a big investment in our brand”, with hopes of catching up with other North American organizations, some of which have been around much longer.
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“We needed to close the gap in terms of the reach that we have and in terms of the strength of our brand,” he said.
“We made a substantial investment over the last two years to take that momentum in Valorant and try to build up our brand. What we’ve accomplished in that time is that we’ve gained more followers on Twitter over the last year and a half than any other organization in North America. In 2022, on Twitter, we had the most engagement of any North American esports org.”
Looking at the future, Moore said he has high hopes for Valorant team-branded skins, which are coming to the game in 2024. “That is one of the reasons we’re optimistic about the investment we’ve made in our Valorant brand,” he said.
Despite being in business for only five years, Sentinels now have as much reach as storied North American organizations, according to Moore, who added that this could lead to better sponsorship opportunities in the future.
Speaking of other revenue opportunities, Moore highlighted the creation of SEN Society, a membership club that quickly garnered, according to him, a thousand paying subscribers. He also revealed that Sentinels is now running its merchandise operations in-house, which will lead to better margins.
In 2022, Sentinels lost $8.2 million, up from nearly $6.4 million in 2021. But Moore remains confident about the future of the company.
“We’re optimistic that we’ll be on a path where we’ll reduce these losses, and hopefully soon we’ll be profitable,” he said.
As of writing, Sentinels have raised almost $65,000 through its crowdfunding campaign, which will run until November 2. The company is valued at $30.09 million.
