Paddy Power-backed sports trading start-up seals €600k investment
Ex-Racing Post chief revenue officer Mike Griffin becomes CEO of virtual stock market for US sports teams and players
A new sports trading exchange platform developed by Irish bookmaking veteran Paddy Power has secured more than €600,000 (£545,983) in funding from investors.
The start-up – American SportZ Exchange (ASX) – aimed to secure €500,000 via the Spark Crowdfunding investment platform last Friday and raised €100,000 within the first hour of going live.
At campaign close, €632,485 had been raised from a total of 188 investors, representing 126% of its initial target based on a business value of €4.5m and a 10% equity stake.
Power, the son of Paddy Power co-founder David Power, has served as brand ambassador and head of communications for the Dublin-based bookmaker, having fronted several of the operator’s most controversial marketing campaigns.
Power will now serve as the first president of ASX and will be joined by former Spotlight Sports Group chief revenue officer and Racing Post commercial director Mike Griffin, who has joined the ranks as CEO.
ASX is a virtual stock market for US-focused sports teams and players where users generate income by speculating on their real-life performance. ASX then takes a small commission on trades placed on the platform, much like Football Index.
Trading will be offered on the platform under the ASX brand and to other brands on a white-label agreement under a rev share model.
However, instead of competing with sports betting operators, ASX will position itself as an independent platform available for integration into existing DFS providers and sportsbooks.
The scoring and gamification methods are identical to existing US based fantasy providers such as FanDuel, which is majority-owned by Paddy Power’s parent company, Flutter Entertainment.
EGR understands the seed funding will be used to launch “post commercial pilots into the US market at scale”, with ASX already in discussions with as many as 10 commercial partners.
These include global streaming platform DAZN, US broadcaster Sinclair Broadcasting, MLB franchise the Philadelphia Phillies and NHL team the Vegas Golden Knights.
“With the ASX platform now built and tested, the immediate focus now becomes user activity, from both organic sources and also through revenue sharing partnerships,” ASX said.
“Our immediate target markets are in the UK and the US, two markets in which the founders have extensive experience and expertise,” the firm added.
The ASX platform has been in development since 2019 and a beta version launched early in 2020.
It will be based in Ireland but focused on the US sports leagues.
The business has also been selected for the Israeli-based Hype Accelerator programme, which assists sports technology start-ups by facilitating partnerships with brands, clubs and leagues.
It also participates in Sportradar’s Accelerator Programme, which offers free sports data for early-stage businesses.
“Our innovative business model rewards clubs and their fans via affiliate marketing mechanisms whilst simultaneously ensuring major new revenue sources from all fans for clubs and leagues via digital rights-based commission,” the prospectus adds.
It is understood company profits will be reinvested in the business, with the overall aim of being acquired by a global operator in online gambling or financial trading within three to five years.