Earnings+More - The startup month - September
The startup month - SeptemberA deeper dive into betr, Inside the Raise with Kinectify, a startup (re)focus on Gaming News Canada +MoreWelcome to edition #2 of the startup month, sent every first Tuesday.
Two jumps in a week, I bet you think you’re pretty clever. A betr bet
None but the brave: During a recent episode of the All-In podcast discussing WeWork founder Adam Neumann’s return with the a16z-backed real estate business Flow, participant Jason Calacanis pointed out Neumann had “credible audacity”. The phrase has resonance when it comes to Joey Levy’s new venture betr. As one source suggested: “I like the bravado”.
The penny drops: Central to the Simplebet and betr propositions is micro-betting and Levy told E+M that the “holy-shit moment” came when he first launched Simplebet and encountered a supply-side that was more geared for European sport as opposed to US sports.
A betr proposition: Micro-betting can “simplify” the betting experience, Levy suggests. “I remember when I loaded up my first betting app, it felt like I was interacting with a spreadsheet.”
The harder they comeMaking a splash: Levy says “the constant pushback” from industry figures was that a direct-to-consumer offering was “too hard and too expensive”.
De-risk: For market access, betr has signed partnerships in key states involving small slices of equity; for the product, it has built the micro-betting platform and will rely on FansUnite for the PAM. Just too lavish to post on the ‘gram: When it comes to marketing, it has co-founder YouTuber-turned-boxer Jake Paul and his 20m Instagram followers. Lloyd Danzig from Sharp Alpha Advisors says betr has “clearly leveraged” Paul's following and noted it already has 100,000 Instagram followers.
Conversion: Danzig pointed out that “time will tell exactly how the LTVs of these users stack up against the CAC and what those unit economics look like at scale when compared to more established operators”. ** SPONSOR’S MESSAGE: Red Knot (redknotcomms.com) provides strategic PR & Marketing counsel to exciting and innovative companies at the intersection of sports, igaming and technology. Kick-started in 2020 by a team of media, sports and betting specialists in New York, London and Dubai, our combined expertise across news, sports and entertainment media, the business of sports, and the explosive gaming sports betting industries, makes us one of a kind. If your business needs a boost, contact Rom@redknotcomms.com. Competitive spaceI wouldn’t do that if I were you: Levy acknowledges the potential for competitors to attack betr in terms of product but suggests any existing operator will be “very cautious”.
DraftKings and micro-bettingMicro-betting in the wild: DraftKings is the only major operator to date in the US that has a deal with Simplebet for micro-betting. Asked whether he was surprised that DraftKings hasn’t made more of micro-betting, Levy suggested it was a “textbook innovator’s dilemma”.
At the plate: Still, Bevilacqua noted that “with one operator alone” in baseball - which he believes might be the “best sport” for micro-betting - Simplebet was seeing $1m of GGR per week “with no marketing”.
The $50m questionBeen there, done that: The skepticism over betr relates to the potential size of the micro-betting opportunity, a question where Levy fully admits the answer is unknown. To European eyes, micro-betting sounds like just another name for the kind of in-play available on sports such as cricket for many years.
Further listening: Joey Levy talks micro-betting with Florida Funders. The month in fundraisings
Inside the Raise - Kinectify
Kinect 4: CEO Joseph Martin told E+M that Kinectify started seriously engaging with investors in November of last year when it targeted “premier” strategic gaming investors with whom it hoped to build relationships rather than simply finding groups willing to give the company funds. He noted Kinectify saw no sign of its fundraise being affected by any funding crunch.
The cap table: The round was led by OpenBet, Acies Investments and the Eastern Band of Cherokee Indians while Eilers & Krejcik Gaming, Quinton Singleton and Seth Schorr and Seth Young, CEO and chief strategy officer respectively of Fifth Street Gaming, also participated.
Insider knowledge: Martin points out Kinectify was “born from inside the gaming space” with the founders coming from having worked in compliance departments at Caesars, William Hill, the Morongo tribe, MGM and others.
The wider picture: Gambling-related regtech provision is a hot area for investment with the interactive opportunity in the US driving the search for technology-driven solutions in areas such as AML and problem gambling. Seth Young from Fifth Street says the space “has been begging for modernization”.
Long-term goals: Martin says Kinectify’s aim is to be the “compliance lynchpin of the gaming industry” with the longer-term aim of building an “industry leader of risk management”. Have faith: Young says he doesn’t need a founder to spell out an exit plan. “That should be somewhat intuitive to the investor if they know their market.”
The takeaway: Young says Kinectify has “genuinely impactful technology built by extremely credible people, and it’s a major innovation in an area that every gaming business struggles with, whether they’ll admit it or not.” Growth company newslinesProphet Exchange has launched its exchange product in New Jersey following licensing approval from the New Jersey Division of Gaming Enforcement. U.S. Integrity has signed a partnership with Thrill One Sports & Entertainment to monitor for betting-related fraud. BetSwap has signed an agreement with PlayUp to launch its online secondary marketplace technology. The offering will be launched for PlayUp users ahead of the new NFL season. BetDEX, the decentralized sports-betting platform effort launched last year by Nigel Eccles of FanDuel fame has revealed an open-source technology platform called the Monaco Protocol which it says will power the BetDEX exchange beta and also its “mainnet” exchange. Startup (re)focus - Parleh MediaWhat’s the latest news? With the regulator finally releasing its Q2 data, all eyes were on Ontario last week and what many suggested were somewhat disappointing totals for GGR. But Steve McAllister, editor-in-chief at Gaming News Canada (as the Parleh newsletter was recently renamed), suggested there are clear signs that the situation will improve in the months to come.
Building momentum: As for Parleh Media, it continues to go from strength to strength. “Our multi-year deal with NorthStar Bets is up-and-running,” says McAllister. “So we’re now providing social media support and original video content to another regulated sportsbook in Ontario.”
Funding update: Parleh raised additional funding from existing and new investors in May and June and has added a couple of advisors to supplement the existing group of executives, says McAllister. The outlook: Parleh Media continues to add sportsbooks and casinos to its roster of clients while it continues to work with operators on further partnerships.
What we’re readingY don’t you: Sometimes accelerators need disrupting too. Fail upwards: “In Silicon Valley, there is always money for the repeat founder.” Contact us
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Sep 5: UK big three's 'dollar faucet'
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Flutter, Entain and 888 analyst updates, Ontario data analyst review, US regional and online update, Startup Focus - Dabble +More
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