Sports Betting Innovator Launches Brand-new Start-up
Douglas FraserBusiness and economy editor, Scotland
Among Scotland's most successful innovation groups is starting once again with a new firm - and has actually protected the most significant preliminary investment of any British start-up company.
BetDEX is being led by Nigel Eccles, who co-founded fantasy sports wagering site FanDuel in 2009 in Edinburgh.
The new firm has seed financing of $21m.
It intends to launch a brand-new open source software application platform, on which others can innovate in sports betting, in the very first half of next year.
The business is hiring personnel from a base in Scotland.
FanDuel was offered to Flutter - formerly called Paddy Power Betfair - in 2018 and is now worth more than $30bn.
However, Mr Eccles and other co-founders remain in legal disagreement with FanDuel's later phase investors over the way in which they structured a takeover, which left the Edinburgh group without a share of the increasing appraisal.
Mr Eccles said that a person thing he learned from the FanDuel experience was to choose financiers carefully.
He told BBC Scotland: "We took a lot of lessons from that, one of which was the importance of who we choose as financiers in this brand-new company, to guarantee their worths are aligned with ours, that they take their fiduciary tasks responsibly, and that they're the best partners for us."
The $21m seed financing for BetDEX consists of stakes taken by 7 backers of US technology companies, including 2 big funds - Paradigm and FTX - which specialise in investing in companies operating with crypto-currencies.
Varun Sudhakar, president of BetDEX, stated: "The sports wagering industry charges high costs for bad products and limitations trades by its most successful users.
"BetDEX is diametrically opposed to this approach. We will successfully incumbents with a markedly remarkable item and low costs, which is now possible with the advent of the blockchain innovation."
As chairman of the new firm, Mr Eccles stated it might look familiar to retail punters utilized to existing online companies.
'Pool of skill'
However, he says that those who use its platform to run their own wagering companies will be able to innovate and create a wider series of betting products.
He said the typical share taken by online bookies is 7% to 10% of a stake, however BetDEX must enable that to fall below 1%.
The company will establish its own betting apps to run on the platform.
Mr Eccles said these would take an "intelligent, thoughtful" approach to the way they are marketed to protect those who have problem with problem betting.
He said the team of around 500 software application engineers who assisted develop FanDuel from Scotland revealed that it remains the place to construct a firm. BetDEX has the same head of technology, Stuart Tonner.
"A lot of that [FanDuel] success was built on an extremely skilled, really skilled engineering team, that constructed this product that could process millions of bets and millions of users.
"There's a genuine talent pool of skilled engineers who helped us develop our item which's what we want to utilize for BetDEX too."