Sports Betting Innovator Launches New Start-up

Douglas FraserBusiness and economy editor, Scotland


Among Scotland's most effective innovation teams is starting again with a new company - and has protected the biggest initial investment of any British start-up company.


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


The new firm has seed financing of $21m.


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


The company is recruiting personnel from a base in Scotland.


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


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


Mr Eccles said that one thing he gained from the FanDuel experience was to choose financiers thoroughly.


He informed BBC Scotland: "We took a great deal of lessons from that, one of which was the significance of who we select as investors in this new company, to ensure their values are aligned with ours, that they take their fiduciary responsibilities properly, and that they're the best partners for us."


The $21m seed funding for BetDEX consists of stakes taken by 7 backers of US technology companies, including two big funds - Paradigm and FTX - which specialise in buying business running with crypto-currencies.


Varun Sudhakar, primary executive of BetDEX, stated: "The sports betting industry charges high prices for bad products and limitations trades by its most successful users.


"BetDEX is diametrically opposed to this method. We will against incumbents with a significantly superior product and low costs, which is now possible with the development of the blockchain innovation."


As chairman of the new company, Mr Eccles said it might look familiar to retail punters used to existing online companies.


'Pool of skill'


However, he states that those who use its platform to run their own wagering companies will be able to innovate and produce a broader range of wagering items.


He said the typical share taken by online bookies is 7% to 10% of a stake, however BetDEX ought to permit that to fall below 1%.


The company will develop its own wagering apps to run on the platform.


Mr Eccles said these would take an "smart, thoughtful" method to the way they are marketed to safeguard those who fight with problem betting.


He said the team of around 500 software engineers who assisted develop FanDuel from Scotland showed that it remains the place to develop a firm. BetDEX has the exact same head of innovation, Stuart Tonner.


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


"There's a real skill swimming pool of experienced engineers who assisted us build our product which's what we want to take advantage of for BetDEX also."