Sports Betting Innovator Launches Brand-new Start-up

Douglas FraserBusiness and editor, Scotland


One of Scotland's most effective technology teams is starting again with a brand-new firm - and has secured the biggest initial investment of any British start-up company.


BetDEX is being led by Nigel Eccles, who co-founded fantasy sports wagering website FanDuel in 2009 in Edinburgh.


The brand-new company has seed financing of $21m.


It aims to launch a new open source software application platform, on which others can innovate in sports wagering, in the first half of next year.


The business is recruiting personnel from a base in Scotland.


FanDuel was sold to Flutter - previously named Paddy Power Betfair - in 2018 and is now worth more than $30bn.


However, Mr Eccles and other co-founders are in legal dispute with FanDuel's later phase investors over the method which they structured a takeover, which left the Edinburgh team without a share of the increasing evaluation.


Mr Eccles said that one thing he learned from the FanDuel experience was to pick financiers carefully.


He informed BBC Scotland: "We took a great deal of lessons from that, among which was the significance of who we choose as financiers in this new business, to guarantee their values are aligned with ours, that they take their fiduciary duties properly, and that they're the right partners for us."


The $21m seed financing for BetDEX consists of stakes taken by 7 backers of US technology firms, consisting of 2 large funds - Paradigm and FTX - which specialise in purchasing business running with crypto-currencies.


Varun Sudhakar, chief executive of BetDEX, said: "The sports wagering industry charges high rates for bad products and limits trades by its most effective users.


"BetDEX is diametrically opposed to this method. We will successfully compete against incumbents with a considerably remarkable product and low fees, which is now possible with the advent of the blockchain innovation."


As chairman of the brand-new firm, Mr Eccles stated it could look familiar to retail punters utilized to existing online companies.


'Pool of talent'


However, he says that those who utilize its platform to run their own wagering firms will have the ability to innovate and create a wider variety of betting products.


He stated the common share taken by online bookies is 7% to 10% of a stake, but BetDEX needs to allow for that to fall listed below 1%.


The business will establish its own wagering apps to run on the platform.


Mr Eccles said these would take an "intelligent, thoughtful" technique to the way they are marketed to safeguard those who fight with problem gambling.


He stated the team of around 500 software engineers who helped construct FanDuel from Scotland showed that it stays the location to build a firm. BetDEX has the same head of technology, Stuart Tonner.


"A great deal of that [FanDuel] success was developed on an extremely competent, very gifted engineering group, that built this item that might process countless bets and millions of users.


"There's a real skill pool of skilled engineers who assisted us construct our item and that's what we desire to take advantage of for BetDEX as well."