GAN Finds Its Sportsbook Platform With Deal For Nordic B2C Operator

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GAN has found its sportsbook platform. 

The Nasdaq-listed-provider announced Monday it was acquiring European company Coolbet for approximately $177 million in cash and shares.

Who is Coolbet?

Coolbet is a B2C operator, focused on the Nordics, Canada, and Latin America

Some more on them from an early investor:

However the real prize for GAN is Coolbet’s proprietary sports betting platform that GAN will integrate into its player account management (PAM) offering.

GAN currently offers Kambi and IGT sportsbooks to its US platform customers like Churchill Downs. Those options will remain available for customers alongside the Coolbet platform.  

The transaction will close in Q1 2021 and values Coolbet at 5.7x trailing 12-month revenues of $31 million.

GAN said it hoped to launch US sports betting managed services “as soon as reasonably possible in 2H 2021”. It will not bring Coolbet to the US as a B2C brand.

New tech talent for GAN

As part of the deal, GAN gains more than 175 new employees and engineering talent, primarily based in Estonia. The B2C operation boasted over 84,000 active customers in the third quarter of 2020.

In fact, Coolbet said it had an “industry leading” customer retention rate of 85% quarter-on-quarter in 2020.

“As a part of our growth strategy, we have been clear that we needed to add a best-in-class sportsbook engine to round out our real money iGaming platform, and we believe Coolbet is the perfect fit for both GAN and our customers,” said GAN CEO Dermot Smurfit.

However, GAN will still have to build out the B2B capabilities of the Coolbet platform. The company also uses Betgenius for much of its pricing, although it does have a sizable pre-match trading team.

Integration on the way

Smurfit added: “Coolbet brings one of the most experienced teams of engineers in the industry. Their technology is built on a similar architectural design as our own, which is anticipated to make the integration process fairly seamless.”

Smurfit said GAN would also look to offer its platform in existing Coolbet markets like Latin America.

Following the announcement, GAN shares fell 14% today. The company also reported Q3 revenue of $10.3 million, up 86% from $5.5 million.

However, earnings came in at a loss of 17 cents per share, below the estimate of 2 cents per share. GAN also saw FanDuel move onto his own wallet for online sports betting during the quarter.