In the public eye: how Novibet plans to use its SPAC merger as a springboard for global growth

Remember SPACs? They’re back. In Greek form. Novibet became the latest operator to take this route to becoming a public company when it signalled its intentions to join forces with Artemis Strategic Investment Corporation in a $625m deal.

The public listing of the company, it hopes, will act as a catalyst for huge growth across Europe, North America and Latam, with a sizeable $135m M&A war chest also in reserve.

With current operations limited to its homeland of Greece, Ireland, Italy and Malta, the exponential growth plan is an ambitious one, as Novibet remains committed to making a dent in the US.

Speaking to EGR Intel, CEO George Athanasopoulos and chair Rodolfo Odoni detail the group’s plans for the future, touching on the decision to relinquish its UK licence despite strong growth in the market and how owning tech is of paramount importance.

George Athanasopoulos, Novibet CEO

EGR Intel: Novibet recently confirmed its intention to go public via a SPAC. How long has the plan been in place and what has that process looked like when teaming up with Artemis?

George Athanasopoulos (GA): We have been in the process of going public for a few years. It was not an initial plan of ours, but it was always in our minds that, at some point, using the leverage for capital raising provided through public markets, and as a formalisation of M&A opportunities on our end, it was something we would be considering.

It goes without saying that the repeal of PASPA in the US allowed for Nasdaq and other big funds to start looking at European operators. It is one of the first times, and more specifically with this industry, that it’s the expertise of European operators being exported to the US, and not the other way round. That’s how it usually works: innovation and business optimisation occur in the US and is then exported to Europe. But this time, it is the European operators having a leg up compared to the American operators.

EGR Intel: What will it mean for Novibet to go public? Will it be a new era?

Rodolfo Odoni (RO): That’s correct. We have a growth plan to expand in different geographies. We want to grow our technology further. So, we need to choose a path, and that path is through Nasdaq.

GA: Novibet has always been destined to become, at some point, a vehicle of mergers, acquisitions and growth. We have been delivering growth quite handsomely for the past few years – growing 100% on the top and bottom lines for many years now – but obviously only in the European environment. We will now have the opportunity, through our listing and capital injection, to expand even further. There are specific markets in our prospectus of the proposed transaction that we are targeting, namely Canada and a few select states in the US as well as Mexico, in the immediate phase over the next two to three years.

EGR Intel: With the US, many operators are now trying to claw out market share, with even some of the bigger operators struggling. How realistic do you think it is to carve out market share for Novibet given your late entry and relatively smaller size?

GA: The expectation for Novibet is to stay within the Goldilocks of profitability in the sector. We never go after a market share at any cost. We are always cost-
conscious, with profit contributing to our decisions. We make data-driven decisions through performance marketing, SEO and CRM activities, constantly making sure we are able to defend any investment case in our expansions.

So, we are not going to be targeting, say for the next five years, to gather a 20% or 30% revenue of market share in those markets. Our intention is to be above 5% and below 15% within that timeframe. We believe that we’re going to be setting a new paradigm on doing so in a profitable way.

This is not the first time we’ve entered as late entrants. We have had this experience in the UK, for example, and the UK is a market with more than 800 licensed operators, with many of them fighting for the population’s attention. Nevertheless, we managed within the span of a few years to grow into a mid-tier operator, and Google Trends showed we were going to be piercing through to the top tier in the next few years. So, with our technology, product and marketing expertise, we are not afraid to challenge competitors.

EGR Intel: Novibet took the major decision to leave the UK market. Focusing more on the US and Latam was part of this, but was it also to do with the level of competition?

GA: Definitely not. We felt very confident that if we chose to continue investing in our expansion in the UK, then we would continue our growth upwards. This can clearly be seen by brand trends as well as our internal management reports.

The decision to surrender the UK licence was straightforward for us. It’s a commercial decision that aligns with our intention to become a listed company in relevant markets. You cannot be a company that is listed in the US and not have any exposure to the US and the American markets in general. So, we decided, painfully, because of the momentum we had built in the last few years, to let go of the UK market and focus our investment and resources on the American markets.

EGR Intel: Did Novibet have many staff on the ground in the UK? If so, what’s the plan for those employees now?

GA: We didn’t have any local staff in the UK. All our business was run via our offices in Malta, Greece and the Isle of Man. But nevertheless, because we’d started targeting Ireland and preparing for specific North American markets, these employees were already focusing on those markets as well as the UK.

EGR Intel: Can you tell us more about Novibet’s plans for developing regions such as Latam?

RO: We recently signed an agreement with Big Bola for Mexico. We’re going to build a hub and Mexico will be the first market we will focus on in the Latam region. We are concentrating on 100% regulated markets, so despite Brazil being a huge, interesting and widely talked about market, it’s still unregulated. The final phase of regulation in Brazil has been discussed for several years. So, of course we’re interested in the markets of Brazil and Chile, but not until they have a firm, regulated environment. For now, Mexico is our priority.

EGR Intel: As Novibet expands into these regions, will you place a focus on getting the best employee talent in the industry to lead you in these new markets?

GA: Absolutely. At Novibet we are giving people opportunities to grow and expand their talent. We believe in developing our staff and enabling them to reach their full potential. On the other hand, we know you cannot substitute local expertise through a generic or globalised-only approach. For all these markets, we are going to be attracting talent and onboarding experienced professionals.

EGR Intel: Another region highlighted in the SPAC announcement was Europe, and Novibet discussed entering multiple markets via JVs or local licensing agreements. However, with the strong regulatory headwinds, particularly in the Netherlands and Germany, how will Novibet navigate such markets?

GA: Very cautiously. Novibet has always been on the right side of the law and we don’t take legal or compliance risks anywhere. But the European market is operating through the fragmentation that happened at an EU level, allowing for local states to regulate differently. It created a lot of upheaval in the beginning, but now we see that things are settling down. Markets like Germany are still up and the dice is rolling on them. Plus, there are many other markets we consider to be stable environments now, like France, Spain and Portugal.

These are markets we know have a long-standing record of stability and in those markets we can take one of two roads available to us. The first one is licensing in the countries that allow late-entry stage and the other option is to become an aggregator, a consolidator of like-minded, mid-sized operators that are only held back by reasons such as running on third-party inferior technologies. Through mergers, we can both find the economies of scale and product enhancement through our superior product and technology.

EGR Intel: When the SPAC deal was announced, it was confirmed there was $135m reserved for M&A. What sort of targets are you looking at? Is M&A for Novibet a Europe-only focus?

GA: No, it’s not just European targets we are looking for, but there are some specific criteria we will always use to assess any target. Firstly, it should be fully regulated with no skeletons in the closet, and secondly it should have the economies of scale we mentioned earlier.

We are not looking to absorb any kind of illegal activities or any company exposed or not fully offering us the opportunity to enter a market. We are looking for minimum overlapping of geographies with maximum opportunities of cost reductions and expansion of product.

RO: We’re looking for healthy, profitable companies or soon-to-be profitable. We don’t believe in business models where you have as much losses as revenue, as is seen in many cases. We are looking for profitable companies.

EGR Intel: Novibet uses its own in-house tech stack and proprietary tech. How important is it to have this ownership and not rely on third parties?

GA: It’s not just about being able to achieve economies of scale when you own the product and technology. For us, it’s about the synergies being created between the software development, product and marketing departments.

Most of our competitors focus on the last part as they, in a sense, operate only as marketeers. There are companies that are investing money, sometimes even throwing money, behind customer acquisition and customer retention. However, we believe that the magic of our recipe is what happens when you have software engineers sitting down with the product development team.

For example, the product team are experts in understanding what is the best UX when it comes to sports betting, and that is coupled directly with the people who know how to develop the algorithms and the software behind it. This kind of synergy allows us to iterate, differentiate and innovate in ways that others cannot.

The proof is in the pudding in the end, right? In one of our markets, Greece, we are already beating companies like Flutter and bet365 when it comes to brand preference. And this is due to a trilateral, unified project of Novibet bringing technology, product and marketing together.

Rodolfo Odoni, Novibet chair

EGR Intel: Has owning the tech been Novibet’s philosophy from the start?

GA: Our first two employees were technology architects, and they are still with us. They are the people who started our whole platform. This was what we always wanted for Novibet, but it was a path that was very tough in the beginning. It would have been much easier to go and grab a skin from any big platform provider and go straight to market, but that would only have taken us so far. We knew that sooner or later we’d need to do it within our own capacity. So, yes, it was indeed part of Novibet’s philosophy from the start. It’s in our DNA and it was a strategic decision, since day one, to keep the technology stack and the product management in-house.

EGR Intel: You’ve noted a 2023 target of $200m in NGR and $37m in EBITDA. How confident are you of hitting these goals and what makes you think Novibet can achieve them?

GA: We are confident in the targets which have been set. They have been discussed and verified by financial analysts that are included in this transaction and give the quality of earnings reviews.

We are confident in delivering these targets following our five-year plan. We are always on a path of growth and profitability and all of these targets will be reviewed in light of the opportunities of specific markets, through M&A and opportunities that have cropped up due to re-regulation in specific markets.

EGR Intel: What are your hopes, aims and expectations for Novibet over the next 24 months?

GA: If there is a vision about the future of Novibet, it is that we have been well trained in delivering profitable growth within our recent past and we intend to continue doing that, showcasing to the world that you don’t have to lose huge amounts of money in the hope of at some point making a turnaround.

We believe that there is a prudent way to do it. First you optimise your platform, product and operations, you achieve profitability and then you scale. This is how Novibet differentiated itself from day one and this is what we are bringing to this market.