A start in life
A LinkedIn OSB offer of help is unsurprisingly taken up, Cameron Conn on achieving a sale, funding round ‘drought’ ends +More
Good morning and welcome to the latest edition of The Startup Month. On the agenda for this issue:
Two months ago the team at the Propus Partners consultancy put out a message on LinkedIn offering sports-betting-related startups a no-strings-attached free consultation.
Pointing to their combined 50 years of experience working in the sports-betting arena, Matt Howard from Propus said in the post “we know why good products have failed”.
The shoutout received a phenomenal response and E+M took the opportunity to ask Howard what prompted Propus to make their offer – and to take a brief look at some of the companies that took them up on it.
Also this month, we interview Cameron Conn, co-founder and CEO at OneComply, which was recently the subject of GeoComply’s first-ever acquisition.
Plus, some funding round news from sector-adjacent payments firm PayNearMe, and horseracing ownership app MyRacehorse .
Stop your messing around, better think of your future.
Start me up
Life as a startup is never easy – so a helping hand can be welcome.
Hard yards: Sports betting is a fearsomely difficult sector for a startup to focus on. The barriers to entry are high and the chances of a young company managing to establish itself are perishingly slim.
Yet, the rise of sports betting in the US has in part fostered growth in a thriving ecosystem of sports-betting suppliers.
Examples of success stories abound of companies formed to feed a desire on the part of the operators to provide constantly evolving and competing offers.
It makes the market ripe for new ideas. But an adage in the realm of startups is that a good idea is not enough.
Among the factors that play into whether a company succeeds or not is that of advice.
The right advice from the right people can be priceless – so an offer from a respected team of industry professionals to provide free advice was always going to attract attention. As Matt Howard put it in his recent LinkedIn posting, the three principles behind Propus Partners have between them 50 years of experience in the sports-betting sector.
It means they are well-placed to be able to evaluate sector-related ideas to assess, first, whether they will work and, second, to guide as to how a company can achieve its goals.
“It’s not easy to break in,” Howard says. “We've seen a number of interesting ideas fall by the wayside over the years.”
He points out that he, Mark Israney and Tom Daniel also have their own startup interests in Virtually Sports and OrbitalBet, “so we know how hard early startup work can be”.
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A sober look
A long hard look in the mirror: When it comes to startups in any sector, it’s not enough to have a great idea. That is merely the jumping off point. “Having a vision is great, but without a coherent strategy how will it get off the ground?” says Howard.
“If someone has an idea that we don't believe has a chance, then we think it's right to say so, with evidence or reason, and not to take money to spin their wheels and get paid,” he adds.
“Sports betting is very hard to navigate, especially for those outside the industry, and good advice from the start can help companies develop products that customers want to engage with.”
Mistakes, I’ve had a few: Every entrepreneur has their war stories – opportunities missed, ideas that went awry, funding that fell through. But, for Howard, one of the biggest mistakes that can be made is for a founder to fail to undertake proper research into the market they are targeting.
“Unless you've got an idea with a genuine USP for a 'must-have' product, there's a mountain to climb to get traction,” he says.
“If you don’t have a very clear picture of who your potential customers are, why they want to buy your product, how they think and how they work, then you're going to have trouble getting them to engage.”
Shark infestation: It is likely that people working within any sector will suggest that startups in their area will find life particularly difficult. But, still, sports betting is a treacherous market to enter and hence one where guidance can be especially important.
“We have seen some incredibly clever products developed in the past, but sometimes they are too clever,” says Howard.
“If it requires a long explanation to people like us, who know industry products well, then chances are it’s too complicated for the mass market.”
Hence, the desire to share the experiences of mistakes made in the past in the hope that it will benefit those facing similar challenges.
“There was actually one company we spoke to where everything that we suggested, they had already thought through, and we couldn't really find much to challenge.”
“Despite this, they told us that having some external validation of some of their thinking gave them a lot of confidence to carry on.”
Say what you see: Candor is important, says Howard. No one wants to hear that their idea won’t work, or has been tried before or indeed has already worked elsewhere. But an honest assessment can save time and money and it is a vital part of the process of sorting the wheat from the chaff.
“If we consider that there is little chance of something being successful, then we feel this is something that should be said,” Howard says.
“That doesn't mean we intend to put people off entirely, but offering an honest and realistic opinion about their ambitions and the hurdles they face is important.”
What do I get? As to why Propus made its offer, Howard says the three partners have already seen benefits from making themselves available.
“The benefit we hoped to get was to widen our network and to see some ideas that were genuinely innovative to the industry,” he says.
“We've been fortunate that this has certainly happened, and we've now met some very bright people running some interesting startups and have learned a lot.”
Three to follow
BroThrow
BroThrow is an Arkansas-based social-betting platform that has great potential applications as either a real money or free-to-play vertical, allowing users to engage and bet with their friends. Howard says CEO Brady Sharp and his team have built a “really engaging product with exceptional UX that is well worth taking a look at”.
Rithmm
The Rithmm team is working on building a no-code platform for US-facing sports-betting predictions. Users can weight factors and biases to fit their view of the relative importance in each sport, then see a list of recommended bets that are produced. “Some of the mathematics that we saw was truly impressive,” says Howard.
Sports Broadcast Media
Sports Broadcast Media provides unique and innovative live and recorded audio-visual content for the betting and broadcasting sectors, covering a range of popular sports. “They focus on relevant betting opportunities as they arise to entertain and engage users,” Howard says. “The team come from a video production background and have a real passion for sports and betting.”
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Exit interview
E+M talks to OneComply founder Cameron Conn about acquisitions, GeoComply and skeletons.
Always on my mind: Cameron Conn, founder at OneComply, which was recently bought by GeoComply for an undisclosed sum, points out that when someone starts a company, there is always an understanding that a product is ideally creating value that can be spotted by outside interests as well as a company’s clients.
“What makes a company a good acquisition is that it’s a well-run company,” he says.
“The exit is always just a by-product of success.”
“If you don't get the exit, you're stuck with this company.”
What difference does it make? Conn doesn’t believe his role with OneComply changes now it is within the GeoComply structure. “My main goal is to still grow the company and to grow the product and to increase revenue and to increase market share,” he says.
“You're now just doing that in alignment with a much larger revenue number,” he points out.
“My job really is to continue to grow value now for the ownership group. But that's no different when you're doing it for shareholders.”
You may ask yourself: Conn argues that the sale to GeoComply was a “once in a lifetime opportunity to be a part of something bigger”. “There is a certain amount of pride in saying ‘I'm going to show you that this was a really good idea that you should have bought and here’s what now your organization is going to get from us’,” he adds.
He doesn’t believe he left too much on the table. “We're here and we've made this decision,” he says.
Ironically, given the footprint of OneComply as an aid to companies seeking licensing, the deal didn’t need to pass through any regulatory hoops, unlike so much else in the betting and gaming sector.
Given the familiarity of the companies to each other – both are headquartered in Vancouver, Canada – it meant the process of getting from A to B on the deal was relatively quick.
Due diligence: If there are any “skeletons in the cupboard” then beware. “If I were to give advice to anyone, it is to say run your company very well,” Conn says. “Because it's always going to come to the surface. And it's going to come to the surface very, very quickly in an acquisition.”
Funding news
A flurry of sector-related funding news brings to an end a seeming drought.
Wait for it… As exclusively revealed by E+M, micro-betting specialist betr is thought to be on the verge of announcing a $30m fund raise, which will value the company at $300m.
The new money will follow the company’s first raise in August when it garnered $50m.
Betr recently acquired the source code to FansUnite’s Chameleon platform for $7.4m.
Don’t stand so close to me: Sector-adjacent payments solutions company PayNearMe has completed a $45m Series D fundraise led by Queensland Investment Corporation and with participation from True Ventures, Costanoa Ventures and August Capital among others.
PayNearMe has a large footprint in the gaming space, including relationships with FanDuel, BetMGM and Caesars.
The company enables cash payments in 40,000 retail locations across the US via a number of payment methods, including Apple Pay, PayPal, Venmo and others.
Forward feature: PayNearMe will be the subject of an Inside the Raise in next month’s edition of The Startup Month.
Are you experienced? The company behind popular global racehorse ownership platform MyRacehorse, Experiential Squared, has announced a $7m funding round led by racing and gaming company 1/ST and its racing, gaming and technology divisions.
Launched in Los Angeles, MyRacehorse makes racehorse ownership accessible to a broader audience.
Using the MyRacehorse app, prospective owners can review, analyze and purchase a fractional share in their desired racehorse for a single one-time payment of as little as $100.
1/ST Racing & Gaming operates racetracks such as Santa Anita Park, Gulfstream Park and Laurel Park,
** SPONSOR’S MESSAGE ** Tried, tested and proven over a decade in the highly-regulated US market, and continuing to expand across Europe, Latin America, Asia and Africa. GeoComply harnesses the power of its market-leading geolocation technology to protect against fraud, including fake account creations, bonus abuse, account takeovers, stolen identities, money laundering, and more.
Visit geocomply.com.
Growth company gazette
You’re on the team: Sports-betting media platform SoBet has been included as one of 13 companies to be admitted to the Techstars Accelerator program for 2023.
The company says its platform delivers expert content in easy to digest methods, increasing transparency and creating a “more modern sports media ecosystem”.
The Unit has announced it will be supplying marketing services to gaming platform PlayStar in New Jersey.
BettorEdge and BettingLadies.com have launched what they say is the first sports-betting community for women.
Simplebet has announced a partnership with BlueBet’s US-facing operation ClutchBet to deliver micro-betting solutions.
Recent startup focuses
Jun 5: AI-assisted odds provider GamePLAI.
May 30: iCasino operator Betty.
May 22: Payments infrastructure firm e-Technologies.
May 15: Alternative sports provider Pro League Network.
May 8: Marketing and development agency The Unit.
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