Smarkets eyes US expansion with growth equity cash injection
Susquehanna Growth Equity to provide future capital as exchange operator closes Series B funding round
Smarkets has closed a significant minority investment from Susquehanna Growth Equity (SGE) to fund its expansion throughout the US and internationally.
The Series B funding round marks the first external investment in the exchange operator since a Series A round back in 2013 that raised £3.8m.
EGR understands the SGE backing is significantly greater than that amount, although financial details of the deal were not disclosed.
The capital will be used to strengthen five business areas, with a primary focus on expanding the company’s presence in the US beyond Colorado and Indiana – where the firm offers its low-margin SBK sportsbook which takes its pricing from the Smarkets exchange – via market-access deals in regulated states.
Smarkets CEO Jason Trost said the business would look to expand into one or two further states with a focus on quality over quantity, with New Jersey likely to be at the top of that list. New Jersey is set to welcome the US’ very first sports betting exchange with the imminent launch of Sporttrade.
Smarkets is also striving to capture a bigger share of the exchange betting market in the UK while accelerating the adoption of SBK in the UK’s mainstream and highly competitive sportsbook arena.
Further growth targets include developing new products and a global recruitment drive amid a pledge to double headcount by the end of 2022.
Finally, the cash injection will allow Smarkets to expand into new and recently entered markets such as Denmark and Sweden.
Smarkets CEO Jason Trost
Trost told EGR: “What we really liked about SGE is that they have given us the financial investment that we needed to execute our vision independent of some outside influence or direction.
“They have given us the backing to go and continue to grow the business that we’ve been building for the last 13 years.
“It’s exciting to see a big brand financial institution get involved in sports betting in a major way,” he added.
SGE joins the Smarkets stakeholder stable alongside Passion Capital and Deutsche Telekom.
The Pennsylvania-headquartered growth equity fund is exclusively focused on growth-stage internet, software, and information services companies.
The firm has invested more than $2bn in companies across the US, Canada, Europe and Israel.
SGE MD Scott Feldman said: “We are delighted to be able to join Smarkets on their upward journey.
“We immediately identified with their vision of using technology to take on the betting industry’s big operators by providing the fairest odds in the world and maintaining a clear focus on product excellence.
“Smarkets has achieved a huge amount with little investment to date and we can’t wait to see them go from strength to strength as they expand further into both the US and UK mainstream market.”