Key Points
- Catena Growth Ventures made its first investment in Collectbase, the parent company behind Repackz.fun, just over a week ago on 21st October.
- Six days prior to that, Catena released some pretty poor preliminary Q3 revenue figures, which had fallen by a whopping 29%. And to make matters worse, they axed the target they’d set for 2026.
- Over in the US, the repack platforms are having some serious issues being labelled as gambling sites, and it’s all a big grey area.
Catena Media’s New Investment Arm Takes a First Step Literally Straight into the Legal Grey Zone
Only a handful of days had passed since a profit warning sent Catena Media’s shares plummeting when, on 21st October, the Malta-based company announced its first deal for its new investment arm, Catena Growth Ventures. And with that deal, it threw its weight behind Repackz.fun and the Collectibles.com collector app, both owned by the US company Collectbase Inc. We’re still none the wiser about how much Catena parted with or what stake they’ve taken in the company.
Repackz sells a white-label pack ripping product that lets casinos, sportsbooks and other online publishers put their own brand on it and pass the risk on to others. By investing, Catena will, no doubt, be opening doors for Repackz in its search business, and introducing Repackz to operators and publishers across its network. Catena CEO Manuel Stan described the deal as a step in the right direction for “diversifying our revenue streams.” Stan also said that Repackz has “a proven product” that leading operators are starting to take live. And he’s right, through its new arm, Catena will be bringing not just cash but also operator relationships and distribution to the table.
The other side of the table is just as chuffed. Collectbase co-founder Dietrich von Behren is talking up Repackz as “one of the most exciting categories in collectables right now” and said that it lets brands sell “real, graded collectables under their own name.” Not everyone is reading it the same way, mind you; some are calling it an acquisition, while Catena is adamant that it’s a strategic investment. Either way, Repackz is at the centre of it all.
The Poor Quarter Behind the Decision
You need to put the third quarter figures into context to understand the timing of this decision. On the 16th of October, Catena put out some preliminary numbers that were really pretty bad, revenue down by a massive 29% to €8.3 million, and they’d scrapped the 2026 target. The company put it down to weaker search rankings and operators cutting back on their marketing budgets. Oh, and there’s also a €30 million to €35 million non-cash hit on the cards as well, that’s the intangible assets stuff. And that’s not even the worst of it, adjusted EBITDA is down to €0.7 million from €2.9 million, and that includes a €0.7 million bonus reversal that doesn’t even count. And if that wasn’t enough, more than 90% of new customers are still signing up through one-off deals, which means there’s virtually no recurring income in sight. Unfortunately, the company’s now got its hopes pinned on TraffiqX, which is a platform they’ve got lined up to launch in the first quarter of 2027.
And just like that, shareholders were left rather less than impressed on Monday 19th October, as the shares tanked by almost 21% in Stockholm.
Resetting a Second Time in Two Years
The shareholders of Catena have been hearing lofty growth estimates from Catena before. In February 2024, the firm committed to achieving double-digit organic growth in revenues and adjusted EBITDA for the years 2025 and 2026. That very plan involved a transition from CPA to revenue-share agreements. However, while CPA is still at 90 per cent, that transition has barely started.
Eight months after that, in October 2024, Catena registered an impairment of €40.0 million regarding the value of sports and casino assets. As the letter dated 14 October 2024 from Stan, Catena’s CEO since 1 July 2024, states, “it is essential that our balance sheet reflects current realities.” Two years after that, another charge is likely to be registered within the €30 million – €35 million range. Both charges, if booked in full, will amount to €70 million to €75 million.
Why Operators Are Trying to Capture Rips?
Rips allow players to feel the excitement of opening card packs on their phone screens, and big operators want a piece of the action. PrizePicks officially launched its Packs product on 21 October, on the very day of Catena’s deal announcement. Within its platform, each pack contains one unique card in secure storage with prices ranging from $1 to $2,500. The card can be sold back to the platform at 100 per cent of its market value defined by PrizePicks from third-party data. If the player doesn’t do anything for three days, the card is automatically sold back.
The rival platforms are building the same cycle, albeit with subtle differences. For instance, Fanatics, a sportsbook operator, offers instant credit with 90 per cent of the card value minus the marketplace fee. In its own example of the $200 card, the player gets $169.20 of the credit. Collector Crypt crossed $1 billion in cumulative volumes in May, some 18 months after the December 2024 launch.
According to Barron’s research, cited by ON360, there were 52 websites offering repackaging of the digital cards. Collector Crypt’s CEO told Barron’s that all cards are being resold instantly, up to 98 per cent of the opened cards. One man’s claim, yet it gives a hint of what the buyer is actually seeking – not the card but the rip.
No Court Rulings Yet
The whole situation with these new products is a lot murkier than the rush of new releases would have you think. In the US, most states are looking at just three things: did the player pay, was it a game of chance, and was there a prize? A September analysis by Womble Bond Dickinson says that California’s weird grab bag law probably does cover repacks, but not factory-sealed packs. That law is aimed at sealed packages of sports cards that were ripped out of their original packaging.
Almost 70 Whatnot customers have filed claims saying its random breaks and repacks in the US are breaking California’s lottery rules. There’s a separate case out now, filed under the state’s False Claims Act, that names both Whatnot and Fanatics Live. Whatnot’s denying the whole thing and as of late September, no arbitrator or court had even made a call.
Regulators in other countries are starting to take a closer look at these products too. Back in February Singapore said they’d be regulating blind boxes, including trading cards, to try and keep a handle on the potential gambling risks. Details on those rules were meant to come out later in the year.
Cash is Tight, And Those Hybrid Securities are a Nightmare
Stan has been going on for months about how Catena’s old way of doing things just isn’t cutting it anymore. At the second-quarter results in August, he put it bluntly “We really need to get off the SEO gravy train”. Right now the company’s got a bit of cash to fall back on, €13.0 million as of the end of June. But the problem is that a massive chunk of that €43.7 million of hybrid bond money they’ve got tied up currently sits there too, and €7.0 million of that is just deferred interest right now. The rate on those has just jumped up to STIBOR plus 12 per cent, and Catena’s decided to just keep deferring paying it. On top of all that, the equity value, excluding those hybrids, is just €75.5 million at the end of June before any third-quarter write-down.
Catena did try to shift some of that hybrid bond load by trying to get people to buy back some of them at a discount. They offered to buy back 20 per cent of the face value, but only managed to get €1.1 million worth, or 2.5 per cent of the total. Guess most of the holders just aren’t willing to part with it that cheaply.
Expert Take: A Smart Escape or Just a Costly Distraction?
We reckon Catena’s right to be looking beyond search, but the numbers just aren’t sitting right with us. Take out that €0.7 million bonus reversal, and Catena’s EBITDA for the quarter is basically zero. That’s what we calculate, not what they’ve said themselves. Then there’s the potential €30 to €35 million write-down that Catena’s expecting to take against equity, which makes the whole thing look a whole lot more precarious.
Our biggest worry though is the behaviour of the people who actually use these products. When a platform boss claims 98 per cent of cards get returned, we just see a gamble, not a hobby. That’s a rival to Repackz, and we’ve seen nothing that says Repackz is doing anything wrong. However, if you slap your own brand on these packs, you’re just taking on all the legal headaches along with it.
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