Financial trading giant Susquehanna has acquired a minority stake in London-based sports betting company Smarkets.
The parties did not share financial details of the deal.
The investment marks the Series B round of funding for Smarkets.
Where will Susquehanna cash go?
Smarkets said it would use the cash to accelerate the rollout of its SBK sports betting app in the US.
Smarkets CEO Jason Trost said the funding would help Smarkets secure more market access deals.
The company is eyeing another one or two states in the near term. But first, Trost said the company will focus on proving its product and operational capabilities rather than an expansive rollout.
Who is Susquehanna?
The investment comes from Susquehanna’s venture capital arm Susquehanna Growth Equity (SGE.) The Philadelphia-based fund specializes in consumer-facing fintech like brokerage app EToro.
Meanwhile, parent company Susquehanna is a trading giant in traditional financial markets, but with some gambling DNA.
Forbes recently described Susquehanna co-founder Jeff Yass as “possibly the greatest gambler on Wall Street” thanks to his poker and sports handicapping exploits.
The company also runs a Dublin-based sports trading unit called Nellie Analytics.
Ideal partner for Smarkets
That combination of finance and gambling makes Susquehanna the ideal partner for Smarkets, Trost said.
“Jeff Yass and the founders are super bullish on bringing fintech to sports betting,” Trost explained.
“Jeff is one of few people that shares the same vision as us. Sports betting is going to be a giant financial market at some point. So the sooner you buy into that, the better.”
Challenging US sports betting status quo
Trost himself is a former financial trader. As a result, he built Smarkets’ first product – a betting exchange – with financial principles in mind.
That exchange will eventually be launched in the US. But the company will first focus on the SBK sportsbook app because it has more mainstream appeal, Trost said.
“We have always been guided by our vision of fixing betting with the best prices and products,” Trost added. “SGE is just as excited as us to challenge the status quo. This is a huge endorsement of our technology and will allow us to further upend the industry by offering bets as close to fair value as possible.”
Demand for low vig
Of course, Smarkets are far from the only company looking to fill a perceived gap in the market for low-vig US sports betting.
“I don’t think other operators have built for this model,” Trost said. “Major betting companies are not thinking about the market like us. From an industry perspective, Susquehanna getting involved is a big deal. They have the financial means to play here.”