Heroic reports losses for 2022, will need further cash injection

Earlier this year, it was reported that Heroic were in dire financial straits as they needed an emergency injection of capital to sustain operations through the summer. After a first round of fundraising failed, the company were able to sufficiently raise nearly $1 million USD in order to take the company through the summer. You can access the full report here.

Concerns remain about the financial solvency of the company considering the current esports winter. As reported first by Pley, the company is reporting a loss of NOK 153 Million, which is approximately $14.3 million USD. Sister company Heroic AS has reported a loss of NOK 65 million ($6 million USD), bringing overall total loss to NOK 218 million ($20.3 million USD) for the year ending 2022.

According to the financial breakdown of the company, Heroic spent approximately NOK 18.7 million ($1.7 million USD) on salaries over the course of 2022. Between January 2022 and December 2022, Heroic employed three full professional teams involved in Counter-Strike, Rainbow 6, and PlayerUnkown: Battlegrounds. For a period of time in 2022 the organization was also involved in Rocket League.

Pley also reports that the total amount of debt owned by Heroic and its sister company accumulates to NOK 92.3 million ($8.6 million USD). Debt is not inherently a sign of despair for the company, since they have recently expanded their Counter-Strike operations in recent years with admission into the Louvre Agreement and acquiring MIBR's BLAST spot in 2022.

Heroic's entrance into ESL's franchise league started in 2021, but only began competing in 2022. The organization was joined by FURIA and BIG in what ESL described as a $20 million USD collective entrance fee. As for the BLAST Premier slot, it is unknown at this time how much Heroic might have paid for it. Given the potentially pricy acquisitions, it's possible that the current losses and debt is due to those expansions in the last 18 months.

However, there was a positive note in the financials, as sales revenue rose from NOK 20.2 million ($1.9 million USD) in 2021 to NOK 39.6 million in 2022 ($3.7 million USD).

According to the financial report, Heroic stated that the budget and cash flow forecast for 2023 shows the company will need an injection of capital throughout the year for further operations. As of now, the company is starting the process to raise additional capital and has shown that historically, the company is able to do so when necessary.