Smarkets, a London-based sports betting exchange operator, received significant investment from an investment fund affiliated with American trading giant SIG, signaling an upcoming push in the US.
Betting Similar to Trading
The significant minority investment made by Susquehanna Growth Equity, an investment fund affiliated to SIG, marked the first time since 2013 when outside money poured into Smarkets. The operator which was founded in 2008 has been on the profitable side since 2014.
According to Scott Feldman, managing director at the investment fund, the focus on technology Smarkets has was the main driver behind the investment. Susquehanna’s parent company SIG is a multi-billion asset quant trading and market making company.
Smarkets founder and CEO Jason Trost outlined the betting exchange operator raised the money to fund its push in the growing sports betting market in the US, underscoring Smarkets’ advantage over competitors in terms of in-house technology.
“… we own all of our own technology — that’s quite unique — and our pricing is industry shatteringly different than everybody else. We’ve just started to press our advantage on those two things and extra capital will help us do that.”Jason Trost, Founder and CEO, Smarkets
Trost, who used to be a stock trader prior to founding Smarkets, strongly believes that betting and financial markets have many things in common, and the interface utilized by his company reflects that, resembling more to a Bloomberg terminal than a traditional sportsbook website.
“Our hypothesis is that in 10 years this is going to be 100% a financial technology play and we’re excited that Susquehanna shares in that vision.”Jason Trost, Founder and CEO, Smarkets
In-House Technology Brings Competitive Advantage
Already present in the parts of the US with its SBK sportsbook product, Smarkets will use the investment to launch into new markets, Trost noted, outlining that the operator would not seek to outmatch competitors in spending, but would rather be more creative marketing-wise.
In terms of potential partnership deals with other operators, Trost was adamant he “didn’t found it to make somebody’s sportsbook technology in-house”, obviously referring to the ongoing trend set by industry leaders like DraftKings which acquired its tech provider SBTech and continued by casino giant Caesars Entertainment which did the same by acquiring William Hill.
Smarkets’ betting exchange in the UK allows bettors to place wagers against each other related not only to sports events, but to other areas of life such as politics and current affairs, and with more than 50,000 monthly users and over $5 billion in bets in 2020, Jason Trost is adamant the UK will remain the “beating heart” of the company.
Smarkets, which employs around 85 people across its London, Malta and Los Angeles offices, smashed the betting volume record on a single event in this year’s Grand National horse racing festival.