Exclusive: Smarkets seeks new investment in bid to crack the US
Investor documents seen by EGR show exchange operator looking for capital to help attack US and UK sportsbook markets
Smarkets is seeking to raise new capital to help fund its US expansion and forthcoming sportsbook launch, EGR can reveal.
According to an investor teaser document, seen by EGR, the firm said it was looking for investors to “support growth into the nascent $17bn US market and mainstream £2.6bn UK sportsbook market”.
The firm is currently beta testing its SBK sportsbook app, and will use the product to spearhead its planned launch in the US.
The firm has offices in Los Angeles, London and Malta.
The investment document highlighted a “record” Q1 2019 for the business, with revenues of £8.4m and costs of £3.8m, leading to EBITDA of £4.6m.
The firm’s revenues are historically volatile thanks in part to the proprietary trading arm. The most recent public figures from the firm show revenues of £20.6m in 2017 with profit of £6.6m.
Around £4.6bn was traded on the exchange platform in 2018, reflecting around 4x growth since 2015.
The teaser document did not indicate a valuation, although one source said the firm was looking to raise £10m.
Smarkets declined to comment.
One industry analyst, speaking off the record, suggested the firm could be looking to go public, adding: “They’d need strategic money to float because the costs incurred for an IPO would be significant (£1m+), and they’d need to write it off their books as soon as possible.”
The firm was loosely linked with an IPO back in 2016.