Flush
Over $100m in new funding set to wash through the sector
Multi-million dollar funds looking for innovative opportunities.
Quarterly funding round-up shows at least $55m raised in Q2.
Inside the raise talks to Vladimir Malakchi at Xanada Investments.
Growth company news includes Huddle’s deal with Sportradar.
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Money, money, money
Cistern of a down: Over $100m of new cash from four new funding sources is promising a flood of new investment in the betting and gaming sector in the coming months.
Folding: Last week, Soft2Bet announced a new innovation fund worth €50m ($54m), which it hopes to be able to invest in both growth companies and mature businesses.
Cash: Also launching in late June was a new fund called Ixia Capital, which hopes to punt $20m into companies working in gaming, esports, digital assets and adjacent tech.
Dosh: Weighing in an unspecified amount of cash into the sector is Xanada Investments, led by Vladimir Malakchi. See’ Inside The Raise’ below.
Wedge: These new funds follow the announcement from sector endemic investor Sharp Alpha that its second fund, worth $25m, is set to invest in early-stage sports, gaming and entertainment businesses.
All the things I could do: The funds are looking at a diverse range of sub-sectors, from blockchain to crypto, esports and casual gaming. Mona Motwani, co-founder at Ixia, says startups in NFTs, crypto and blockchain are “rewriting the rules of business.”
“They are challenging the financial market and redefining how we think about value, trust and businesses,” she adds.
Soft2Bet says it is looking for opportunities with growth companies in “casual gaming, AI, traffic differentiators or behavioral-UX analytics” as well as “high-margin gaming software solutions that achieve strong profitability and scalability.”
Xanada is looking at “innovative” platforms, game providers, payment solutions and affiliate networks.
A man like that is hard to find: Xanada’s Malakchi says he is “truly excited” by the variety and potential of the startups he is encountering. Out of ~80 applications reviewed so far, he says, “many are showing incredible promise with interesting ideas, well-structured business plans and solid background.”
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Incentive Games has increased its stake in Canada-based free-to-play games provider HotTakes. The company has built a ‘free trial’ environment where newcomers can experience the thrill of sports betting without the financial risk.
Kelly Kehn has announced via LinkedIn her departure from the role of industry relations partner at endemic investment house HappyHour.io. She said that in her time at HappyHour, the firm had “built a brand that is synonymous with iGaming innovation.”
“We connected the best of the best in the industry to the newcomers,” she added.
Watch this space: Kehn added that the journey “doesn’t end here,” saying she will soon be joining the board of one of the HappyHour portfolio of companies and will be “working on something extra special that aligns my passion for an equitable future with startup innovation.”
Staying with the free-to-play sector, “media experience” company Dizplai has acquired F2P platform PickGuru and has formed a new gaming division.
Verse Gaming has announced the launch of Verse Media, a new business unit that will expand upon the digital and social brand of Verse Fantasy.
iGB Live in Amsterdam will feature a new Launchpad competition with prizes on offer worth €10k,. It will be hosted by Clarion Gaming chair Michael Caselli, who will also head up a panel of judges that includes David Sargeant, Vladimir Malakchi from Xanada and Tony Pearce, CEO at Reality+.
Quarterly funding
Money talks: The pace of sector-related funding rounds slowed slightly in the second quarter, with Earnings+More tracking 10 deals worth at least $55.1m. This compares with 16 deals tracked in Q1, which raised a total of $60.6m.
It means total H1 funding reached at least $115.7m from 26 tracked deals.
Cum on Thiel the noize: The biggest deal of the year so far came with Polymarket’s $45m Series B funding round, led by Peter Thiel’s Founders Fund and with the participation of existing investors 1confirmation, ParaFi and General Catalyst.
As per yesterday’s E+M, Polymarket made the social media weather last week when its market on Joe Biden standing down from the presidential election was widely shared.
Other funding rounds achieved in the quarter include the €3.5m raised by decentralized blockchain-based casino platform DeGaming. That funding came from Dubai-based XVC Tech.
Also raising money were social betting operator Kutt, which completed a $1m round with investment from Lightning Capital.
Meanwhile, Enteractive, and Ously Games received follow-on investments, while Skores was the subject of an MBO with VC participation and Daymade received undisclosed funding from Zeal Ventures.
BlinQ and you miss it: The last deals of the quarter came within the last week. LinQ, a new platform designed to enable mobile games developers to enter the real-money gaming market, raised $2.3m from investors including a16z Games Speedrun, Drive by DraftKings and Sharp Alpha.
Kero Gaming announced a $2m round led by Eberg Capital and with the participation of Avenue H, Yolo and Sharp Alpha.
Meanwhile, Xanada has completed its first investment in no-code provider Promofy with an undisclosed sum.
Exit signals: Player props data provider Sports IQ sold up to DraftKings in a deal that sources suggested with earnout is likely to be worth up to $50m. As E+M revealed last month, it is thought micro-betting supplier Simplebet is similarly being pursued by DraftKings.
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Inside the raise – Xanada Investments
Self realization: Vladimir Malakchi, CEO and managing partner at Xanada Investments, makes the point that as a self-funded vehicle without the need for external money it allows the fund to “bypass the typical challenges of raising funds and instead focus on the real challenge: investing wisely and strategically.”
“The fund’s focus is squarely on nurturing our investments and expanding our ecosystem,” he adds.
“We prioritize the development of our projects, where we serve as the primary sponsors and stakeholders.”
With this in-built flexibility, Malakchi says the aim is to deploy capital in a broad spectrum of the gambling sector from casinos to cutting-edge tech innovations. The priority, though, will be projects that enhance the gamification ecosystem and drive user engagement.
He notes the fund is interested in “innovative” platforms, game providers, payment solutions and affiliate networks.
“We’re particularly interested in ventures that push the boundaries of technology and offer new, engaging experiences for users.”
He adds that by investing in diverse areas, he believes Xanada can “create a more interconnected and robust gamification ecosystem.”
Inputs: Malakchi says the intention is for Xanada to be the principal investor in each company it hopes to inject cash. The average investment, he suggests, will be $1m-$1.5m.
“While we are open to collaboration with other funds, our current focus is on developing our ecosystem,” he says.
Growth company news
Prop ’til you drop: Micro-betting and player props odds provider Huddle has announced a deal that will see it become a provider within Sportradar’s unified odds provision feed, giving its clients access to Huddle’s range of alternative odds.
The deal eliminates the need for individual operators within the Sportradar ecosystem to devote any development work to integrate the new odds offering.
The new arrangement marks a further advancement in the odds provision space, which has been the subject of some major developments in recent years including a number of high-profile acquisitions.
As per above, most recently player prop specialist Sports IQ was snapped up by DraftKings for an undisclosed sum believed to be in the region of $50m.
Meanwhile, Simplebet is also the subject of M&A chatter, with major client DraftKings once again in the frame.
Last year, alternative odds supplier Angstrom was bought by Entain and is now being employed to provide bet builder products to BetMGM.
+More news
A new games studio based in Sweden called Aftermath Interactive has completed a strategic agreement with a US-based law firm called Hensel Grad to develop a skill-based poker game for the US market.
US-based games studio startup Konquer’s first game is now live in New Jersey on DraftKings and Golden Nugget Online.
Pro League Network has received approval for wagering on CarJitsu in New Jersey.
Meanwhile, a new app dedicated to real-money gaming on tractor pulling called Full Pull Picks has launched.
Free-to-play provider Splash Tech has partnered with Altenar to deliver engagement tools across its platform. Its entire free-to-play sports product suite will be integrated, including Daily Jackpot Predictor, Pick6 and its newest release PlayBuilder.
Ahead of the Euros, gamification provider Low6 teamed up with FairPlay Sports Media’s Oddschecker brand to offer Euro24 Bet Bingo.
Calendar
Jul 19: Evolution
Jui 24: Churchill Downs (earnings)
Jul 25: Churchill Downs (call)
Jul 31: MGM Resorts
Aug 8: Penn Entertainment
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