Sports Betting Innovator Launches New Start-up
Douglas FraserBusiness and economy editor, Scotland
One of Scotland's most successful innovation groups is beginning once again with a brand-new company - and has protected the most significant initial investment of any British start-up company.
BetDEX is being led by Nigel Eccles, who co-founded dream sports betting site FanDuel in 2009 in Edinburgh.
The brand-new firm has seed financing of $21m.
It aims to launch a new open source software platform, on which others can innovate in sports wagering, in the very first half of next year.
The business is recruiting staff from a base in Scotland.
FanDuel was offered to Flutter - previously called 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 phase investors over the method in which they structured a takeover, which left the Edinburgh group without a share of the increasing evaluation.
Mr Eccles stated that one thing he gained from the FanDuel experience was to pick financiers thoroughly.
He told BBC Scotland: "We took a lot of lessons from that, among which was the value of who we choose as investors in this new organization, to guarantee their values are aligned with ours, that they take their fiduciary responsibilities properly, which they're the best partners for us."
The $21m seed funding for BetDEX consists of stakes taken by 7 backers of US innovation companies, including two big funds - Paradigm and FTX - which specialise in buying companies operating with crypto-currencies.
Varun Sudhakar, president of BetDEX, stated: "The sports wagering market charges high costs for poor items and limitations trades by its most effective users.
"BetDEX is diametrically opposed to this approach. We will effectively contend against incumbents with a noticeably exceptional product and low fees, which is now possible with the advent of the blockchain technology."
As chairman of the new company, Mr Eccles said it could look familiar to retail punters used to existing online firms.
'Pool of talent'
However, he states that those who utilize its platform to run their own wagering firms will have the ability to innovate and produce a larger variety of betting products.
He said the common share taken by online bookies is 7% to 10% of a stake, but BetDEX should permit that to fall listed below 1%.
The business will establish its own betting apps to operate on the platform.
Mr Eccles stated these would take an "intelligent, thoughtful" approach to the method they are marketed to secure those who deal with problem betting.
He said the group of around 500 software application engineers who assisted construct FanDuel from Scotland revealed that it stays the place to build a firm. BetDEX has the same head of innovation, Stuart Tonner.
"A lot of that [FanDuel] success was developed on an extremely knowledgeable, extremely talented engineering group, that built this product that might process millions of bets and countless users.
"There's a genuine talent swimming pool of experienced engineers who helped us build our product and that's what we wish to leverage for BetDEX as well."