Former Sky Bet CEO says he would be “reluctant” to invest in B2C startups
Richard Flint suggests better opportunities exist in the B2B space amid challenges of high CPA levels and competition
Former Sky Bet CEO Richard Flint has claimed the B2C startup environment is “more challenging” than it was 20 years ago as he pointed to B2B investments as a better opportunity.
Speaking at the CMS Gambling Conference yesterday, 19 June, Flint suggested that investors would be more attracted by propositions in the supplier side of the sector.
Flint, who is now the chair of dog food company Butternut Box and hospitality firm Seat Unique, suggested the B2C vertical was not experiencing the same level of scale as previously witnessed.
The CEO said: “I’d probably be reluctant to invest in startups. The B2B market [with] games suppliers or RegTech, that use data to identify customers and help companies with affordability checks and other things, I think there’s opportunities there.
“I think in the B2C space there isn’t quite a scale game these days. I see a lot of social betting ideas or peer-to-peer betting or things that are not unlike Football Index that are innovative and may be seen as gambling, maybe not.”
The former Sky Bet boss went on to note the specific difficulties for B2C firms looking to break through, given the hegemonic nature of the UK market.
He continued: “I think people in those startups don’t understand that often these are gambling products where they will need a licence. I think for those that go over that hurdle, you’re competing with gambling companies with higher customer lifetime values.
“You either need to have a good way of monetising customers or low CPAs to make startups work, which, in practice, you don’t see very often.”
Flint also referenced comments made by Gambling Commission CEO Andrew Rhodes, who joined Flint on the panel alongside Betfred CEO Joanne Whittaker and evoke CEO Per Widerström.
The GC CEO referred to a previous speech in which Rhodes said the regulator’s compliance focus would shift to smaller operators following a slew of settlements and penalties for larger firms in the UK over the past two years.
Flint added: “The other sort of thing I’d be nervous of is there are certain third or fourth-tier operators that have got some traction. I’d be fearful they have lower standards for regulatory compliance and customer monitoring than the bigger guys, that’s a generalisation – some will and some won’t.
“For better or worse, I think it is a more challenging environment for startups than it was 20 years ago.”