The largest Croatian esports franchise Friendly Fire raises capital on Funderbeam

Few sectors can today be confidently said to be developing day by day, especially in times when the crisis mercilessly tramples on the global market and supply chains. However, there are companies that, in defiance of all economic hardships – are recording growth.

Esports, as a form of competition in video games, is gaining popularity day by day, and for the past few years, this was something that major investors in Croatia probably had no idea about. Today, it is one of the hottest topics, and the interest in investing in the industry is greater than ever.

Based on such exotic and entirely new ideas, the first esports franchise gaming center in Croatia called Friendly Fire was established. It was founded by David Kosir, who is also the director of the company, and they opened their first gaming center back in 2017.

– We want to become like McDonald's in the world of gaming – he stated.

Since the beginning, they have been recording growth 

Today, they count nine locations in Croatia, Bosnia and Herzegovina, and Austria with as many as 75,000 active users, and recently, entrepreneur Andrija Čolak, owner of Surf'n'Fries franchise operating in numerous countries worldwide, joined their team as a co-owner. All of this happened, says Čolak, at just the right time – because today they presented the launch of an investment campaign of up to 600,000 dollars or about 4.5 million kuna on the Zagreb Stock Exchange with Funderbeam SEE .

– These numbers can always change if the investments from the start are greater than anticipated – concluded the company's director David Kosir ambitiously.

When we think about it a little more, it would not be unexpected for this innovative tech idea to exceed its goals in the early stages of fundraising, considering we are talking about an industry whose growth potential is almost immeasurable. Day by day, more and more children, as well as adults, are deciding to engage in sports – but those over the internet. 

– The market in the West is almost untouched. China already has about 150,000 gaming centers, and Korea has 20. Esports is experiencing exponential growth, and new brands are constantly appearing on the market. A significant advantage is that there is still no number one; in that place, we see our Friendly Fire – commented Kosir.

Software as a solution 

He added that the success of their franchise is guaranteed, among other things, by the 'secret ingredient' that makes it all possible – the software they have already created. It is about implementing technology into the franchise in such a way that the software solves most of the problems that arise in maintaining gaming centers. Additionally, Friendly Fire is currently, as the owners say, the only esports franchise that has developed its own software, which is a significant advantage in the market. 

– Operationally, it is a very simple business; it is not difficult to run such a franchise. The software even sets the service price itself and determines who will sit with whom in the gaming center based on the players' abilities to ensure fair play – commented Čolak, who has been dealing with franchises for 15 years.

Unlike popular restaurant franchises, esports seems to be a much more profitable option precisely because of its simplicity. To put it simply – you just need to connect the computers and let the software 'do its job'.

– The problem with franchises is multidimensional. Imagine investing 300,000 dollars in a Subway franchise only to receive 30,000 dollars in net profit in return – added Kosir, stating that they will only seek back half of the initial investment.

Big plans, but also potential 

In addition, the company owns its own brand of gaming equipment and an application without which participation in Friendly Fire gaming centers is practically impossible. The reason for this is a greater connection of users with the brand, and because of this, they expect much better results in the future as they stand out in this regard.

– This is the first step towards a broader plan, which is to achieve an exit worth 100 to 300 million dollars within four years – commented Kosir.

Interestingly, a franchisee of their brand in the USA needs to invest about 250,000 dollars, and they receive back as much as 140,000 annually, which means that the return on investment is possible within two to three years, according to their calculations.

– I have been dealing with franchises for years, and I have never seen things so well organized. Moreover, Friendly Fire is very profitable considering that the software does all the 'heavy lifting', which is an advantage at a time when many companies are struggling with hiring – concluded Čolak.