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Short Summary
SportEx is forming a regulated securities exchange, offering futures contracts for elite sporting event outcomes (like weather derivatives…for sport). It's a hedging tool for bookmakers managing risk, and day-trading for financial traders. B2B only.
Highlights
- This is the "holy grail" of risk management for the sport industry
- Experienced, cohesive management team and world-class board
- One-quarter of current Series B target investment amount in hand
- Preparing to launch & hit cash flow positive in first 6-9 months of '24
- True first-mover advantage and competitive barriers are in play here
Overview
| Target | 17,500,000 |
| Minimum | 9,000,000 |
| Investment Raised | 300,000,000 |
| Previous Rounds | 100,000,000 |
| Stage | Breaking Even |
| Investor Role | Any |
The Business
A void exists between financial markets and gaming firms. Sports betting operations (bookmakers) are based on outcome risk from sporting events but have no viable options for managing this risk externally (hedging). Financial firms have an interest in trading this type of risk, but do not have access to bookmakers in an independent, regulated environment. SportEx resolves this market failure, providing a regulated financial platform--not a betting house--that offers futures contracts with which outcome risk can be managed in real-time. These securities contracts have no default risk and are backed by insurance, to bring together bookmakers and financial traders for the first time. This unique marketplace will attract global liquidity.
The Market
SportEx will cater exclusively to regulated businesses, from licensed bookmakers in most global jurisdictions to financial institutions such as hedge funds, ILS traders, insurance companies, and the like. These traders will have varied (a) trading skills; (b) domain expertise in sport; and (c) trading objectives, and this variety will present an efficient trading market. Liquidity sources will be both from the financial world (including high-frequency market makers) and the gaming world (including betting syndicates), further strengthening the ability of participants to trade in volume. Deep liquidity, price transparency, and low transaction costs will combine to fully serve the needs of these varied and sophisticated trading entities.
Progress/Proof
SportEx is nearing the launch of operations and cash flow. Recent milestones reflect that we have overcome the bulk of crucial "startup risk" obstacles and are now positioned to build out for launch: - Solid, experienced management team and world-class board of directors in place and well-coordinated; - Strong support from Gibraltar regulators, with all license applications accepted and in process; - Industry partners in place to deliver all needed functions; - Bank accounts formed; - Critical path timelines are now visible and with high certainty; - Signing up liquidity providers; - Remaining capital requirements are now in focus to conclude this capital raise. Over a dozen investors have participated in our final, Series B round so far.
Objectives/Future
This late-stage outreach to angel investors reflects our goal of exceeding our subscription target for a larger cash buffer, in response to rising costs and global economic uncertainty in 2023. SportEx will use its initial market dominance to build the world's largest pool of liquidity in sporting risk. In so doing, the SportExchange will become both the global source of price for sporting risk and the world's clearinghouse for such transactions. Simply put, SportEx will be the Forex for sport risk worldwide: the single marketplace for all such trading. Phase two initiatives include monetising our unique market data for resale to clients and strategic partners, and integrating the SportExchange with leading sport data service providers.
The Team
A number of our team are transitioning from other full-time positions in order to join SportEx and relocate to Gibraltar. For this reason, we'll share their information with interested investors on an individual basis. Long prior to full-time roles, the team have been contributing to the formation and evolution of this project. Thanks to a cohesive and committed effort, we have prevailed, adapting the business model for unprecedented success. Such dedication and a true esprit de corps are unusual in most startups and are SportEx's secret weapon. We've also brought in "rock star" board members, including the former CEO of one of the world's largest securities exchanges, and a former deputy gaming regulator from a prominent jurisdiction.
Michael J. Miller
Founder and Executive Chairman
Mr. Miller’s background is in American business law. After a 14-year legal career, he retired from practice in 2007 and sold his firm in 2008, to focus on entrepreneurial endeavours. Since 2009, Mr. Miller has served as a legal and transactional consultant to business owners, while developing a specialised risk transfer contract for the sports market. This development process culminated with the 2019 formation of SportExchange Limited, a Gibraltar holding company, which now owns all rights in these proprietary contracts and conducts business under the (UK) trade mark "SportEx." LinkedIn: https://www.linkedin.com/in/michael-j-miller-a030b754/
The Deal
Looking for PKR 1,463,000,000 - Min per Investor PKR 9,100,000 The initial funding came from the founder, who is currently all-in, and a number of small angel investors who contributed more than £2.3 million. A mezzanine round of approx. £675K took place in late 2019, just before a massive disruption from COVID. Thus, prior to this Series B Round, about £3 million in outside funding was received. Over a dozen Series B shareholders are already in the current subscription offering of 10% of the equity in SportEx for £2 million, or £2/share (£20MM valuation). Several of our board members and our lead mezz round investor have joined this round. A desire to oversubscribe this final raise by a further £2MM has led us to open it up to angels here. ADDITIONAL DOCUMENTS ARE HAPPILY PROVIDED UNDER NDA