A new fantasy sports app wants to let people turn their digital spare change into contest entry fees.
Spare change from digital transactions is added to a pot, which can then be used to enter fantasy contests. Users still set their lineups like traditional daily fantasy sports.
Low-cost lottery alternative?
Hedge co-founder Jackson Fitzgerald said the app aimed to provide “the life-changing hope mechanism of the lottery, without the negative financial drawbacks.”
“We say our mission is to allow spare change to change someone’s life,” Fitzgerald said.
The company is initially focusing on fantasy contests, run on its own technology. However, it eventually hopes to expand to sports betting and casino games.
The company recently closed a $250,000 angel funding round, bringing its total raised to $350,000.
The firm is based in Pennsylvania with investors based in Pittsburgh. Poker player Maria Ho is an advisor.
Despite the DFS focus, Fitzgerald said Hedge’s biggest rivals were Acorns and Stash, rather than FanDuel and DraftKings.
“We see ourselves as part of the spare change economy,” Fitzgerald said. “We’re complementary to the DFS firms rather than a competitor.”
He pointed out that 70% of Acorns users had another form of investment or brokerage account.
Grassroots campaign for Hedge
Hedge currently has six full-time employees, and plans to build an initial user base via college campus activations.
“None of these big operators have a significant college presence, so we are going to do a grassroots campaign, targeting users who love fantasy but maybe don’t have much money,” Fitzgerald added.
Like financial spare change apps, Hedge users can set risk-tolerance levels. A high-risk approach would mean entries into guaranteed prize pool tournaments, while a lower risk tolerance would mean more cash games and double-ups.
The product is currently in “stealth mode” but plans to move into beta in early December, Fitzgerald said.
The product is the latest DFS start-up to attract funding, as investors look for a lower-cost alternative to sports betting.