An investment fund focused on US online gambling has raised more than $50 million for its first fund.
Bettor Capital, founded by former Barstool and FanDuel executive David VanEgmond, announced details of the raise Wednesday.
VanEgmond said the $50 million is just the first close of capital commitments, with an ultimate target raise of $120 million.
Details of Bettor Capital Fund I
The firm’s Fund I will focus on early-stage investment opportunities in real money gaming software and technology. Investments will center on the US market and on the B2B side of the sector.
Early-stage investors in US sports betting have generally taken a “picks and shovels” approach to start-ups.
That means invest in companies who provide services to the giant operators, rather than compete against them.
Sports betting domain knowledge
For instance, Bettor Capital announced its first investment last week in supplier Data Skrive. Data Skrive generates automated previews for sports events that could potentially encourage bet placement.
“We frankly think there is probably not going to be another FanDuel or DraftKings, so we aren’t focusing on B2C,” VanEgmond told LSR. “We like the high margin software businesses in B2B that won’t require as much capital to scale since they won’t need huge customer acquisition budgets.”
VanEgmond said online gambling is a potential $50 billion market in annual revenue by 2030.
“We can find and invest in the innovative software companies in the supply chain of this industry who are poised to tap in nicely to that (total addressable market.) Plus, we think we can get the best deals because we are the only fund dedicated to this space,” VanEgmond said.
New advisory board for Bettor Capital
VanEgmond is joined at Bettor Capital by Jake Kleiner, who led the early-stage investing practice at US Bank and was previously an investment professional at Vista Equity Partners.
Alongside the initial raise, Bettor Capital also established a board of advisors, including:
- Melissa Blau, founder of iGaming Capital
- Julie Haddon, former SVP of Global Brand & Consumer Marketing for the NFL
- Steve Kaplan, co-owner of multiple professional sports teams including DC United and Swansea City
- Carl Sottosanti, former Executive Vice President and General Counsel at Penn National Gaming
- Carl Vogel, former Chairman of the Board of FanDuel
Editor’s note: The parent company of Legal Sports Report has a business relationship with Data Skrive.