Egyptian e-sports platform GBarena announced on Monday that it has acquired the Tunisian gaming startup, Galactech. The acquisition, according to Forbes Middle East, is a share swap deal worth around $15 million. Share swap, otherwise called stock-for-stock, refers to a deal wherein the ownership of the shares in the target company (Galactech) are converted into the ownership of the shares in the acquiring company (GBarena) as per a predefined swap ratio. This means, GBarena is buying Galactech with a portion of its stocks.
Though Galactech’s valuation wasn’t revealed, GBarena was reported to enjoy a valuation of $45 million. According to its website, the e-sport platform has over 650,000 users across 27 countries, including Saudi Arabia, Egypt, and the UAE.
Founded in 2015 by Samer Wagdy and Mustafa Zaza, GBarena prides itself as the pioneering e-sport platform in the MENA region, with a mission to connect all e-sport stakeholders in MENA and the entire world.
“This acquisition is one step forward towards achieving the company’s vision, which is to be the leading aggregator in MENA, serving all stakeholders in the industry,” said Wagdy, CEO of GBarena.
Leveraging Galactech’s already-built business rails, this acquisition is expected to help GBarena gain ground in Riyadh, Dubai, and Tunisia. Galactech will also be able to tap into both GBarena’s established user base and resources to strengthen its presence in the region,” said Houcem Maiza, Galactech founder and CEO, who has now joined GBarena as co-CEO.
Galactech, founded in 2016, has 200,000 active users and has raised $1.5 million from three rounds from OTF, OQAL angels, and the Younis Family Office in Tunisia.
Eight-years-old GBArena has raised $700,000 from two rounds and an undisclosed third funding round from AUC Angel and La French Tech, and an undisclosed support from the Egyptian Ministry of Communication. Forbes reported that GBarena is expected to close its Series A funding round later this year.
The gaming industry has recorded an astronic growth over the past three years, thanks to the intervention of the COVID-19 lockdown. According to a Research and Markets report, the mobile gaming market is predicted to witness a compound annual growth rate of 12.6% from 2021 to 2026. The gaming industry is growing in the MENA region, a Redseer report says, and the gaming market in MENA is expected to surpass $5 billion by 2025, increasing by 19% from 2019, with Saudi Arabia and the UAE leading growth levels.
GBarena said it is eyeing more acquisitions of gaming studios and platforms, especially in the fields of Web3 and AI.
This is the second publicly announced merger and acquisition (M&A) this month in Africa, and the second for Tunisia and the Maghreb region, following BioNTech’s $686.5 million acquisition of Instadeep.