ScoreStreak has found it necessary to cease operations in lieu of insufficient funding. The break has been listed as temporary in hopes that more investments will come into play.
ScoreStreak used an unconventional method of operating their DFS site. ScoreStreak was able to get started after generous funding in the amount of $1.2 million. This funding, unfortunately, did not even carry the site through its first year.
Games on the site use real money deposited by players. The members do not need to worry about funds previously deposited, these will be available for withdrawal by the players.
A portion of the email with information provided to users reads as follows:
Over the last two years we’ve seen incredible growth from our beginnings as a small start-up in Silicon Valley to having thousands of active users playing our games each month. Late last year we began the search for our next round of funding and the process has taken longer than any of us expected. WE are currently seeking an investment of $5 million to bring you significantly larger guaranteed prize pools, new site features and more users to the community.
In order to ensure the best user experience possible, we will be temporarily suspending all operations at Scorestreak until our next round of funding has closed.
The email seems to be sugarcoating the fact that they have obviously lost all monetary resources. A quick check of the Frequently Asked Questions on the website provides substantial information on the subject. Some information offered, however, seems contradictory to their current predicament. The user base is said to be on the rise with a growing customer intake monthly. Despite the growth, sufficient resources remain to continue the ScoreStreak site at present.
Simply put, we need to raise more money.
But our expenses are still higher than our revenues. We have important features to add to our app and website, and we know that our players want larger guaranteed contest prizes. All of these things require us to raise more funding.
Continuing or Accepting the Loss?
Scorestreak will have to weigh the odds of actually being able to convince investors to fund their site considering the current interest in the DFS community. A more permanent closure may loom on the horizon for ScoreStreak. Once the drastic course of complete shutdown has commenced, a reopening seems to be a distant desire. It still may be possible to reopen the site, however.
ScoreStreak enjoyed a successful beginning with the early funding and even added an award to its name. The Fantasy Sports Trade Association’s Elevator Pitch was awarded during the previous year’s conference under the precedence of “up and coming fantasy business.”
The CEO Ross Borden tried something different with the formatting of Scorestreak. Having worked previously for NC Soft, Namco, and 3DO, experience remained on his side. Instead of employing the common salary-cap format, ScoreStreak put a new method in place. The players were given the option to choose a player without restrictions. Points were earned by reaching he goals set for the player in question.
The Beginning of the Decline
The industry of DFS is not lacking in monetary backing, however they have taken different routes. Some more successful companies like Victiv and Fantasy Feud have depended on funding by building behind sites like DraftKings and FanDuel. Most users actually ask themselfves which fantasy sites is better Fanduel or Draftkings.
There are new sites pending as well that threaten the continued funding of ScoreStreak. ScoreStreak will be responsible for securing investors with information that will sway them in the direction of their site in contrast to other similar sites. The site will need to present a decent size customer base as well as a desired program plan. They need to prove themselves competitive in the DFS community. Monetary necessities needed to form a decent player base and become a widely used site are increasing.
ScoreStreak is a smaller site, thus leaving success a lesser possibility when even the larger sites are struggling with expenses outweighing the earnings. It will be interesting to watch the progress of similar small sites. ScoreStreak might not be the only DFS falling prey to financial troubles in the near future.