Sports Betting Innovator Launches New Start-up
Douglas FraserBusiness and economy editor, Scotland
Among Scotland's most successful technology groups is beginning again with a new firm - and has protected the most significant preliminary financial investment of any British start-up company.
BetDEX is being led by Nigel Eccles, who co-founded dream sports wagering site FanDuel in 2009 in Edinburgh.
The brand-new company has seed funding of $21m.
It aims to release a new open source software platform, on which others can innovate in sports betting, in the very first half of next year.
The business is hiring staff from a base in Scotland.
FanDuel was sold to Flutter - formerly called Paddy - in 2018 and is now worth more than $30bn.
However, Mr Eccles and other co-founders are in legal dispute with FanDuel's later stage financiers over the method which they structured a takeover, which left the Edinburgh team without a share of the rising evaluation.
Mr Eccles stated that one thing he learned from the FanDuel experience was to choose investors carefully.
He informed BBC Scotland: "We took a great deal of lessons from that, among which was the significance of who we select as financiers in this new company, to ensure their worths are lined up with ours, that they take their fiduciary duties properly, and that they're the best partners for us."
The $21m seed funding for BetDEX consists of stakes taken by seven backers of US innovation firms, consisting of two large funds - Paradigm and FTX - which specialise in buying business running with crypto-currencies.
Varun Sudhakar, president of BetDEX, said: "The sports wagering industry charges high costs for bad products and limits trades by its most effective users.
"BetDEX is diametrically opposed to this approach. We will successfully complete versus incumbents with a markedly remarkable product and low costs, which is now possible with the advent of the blockchain innovation."
As chairman of the brand-new company, Mr Eccles said it might look familiar to retail punters used to existing online companies.
'Pool of skill'
However, he says that those who use its platform to run their own betting firms will have the ability to innovate and develop a larger range of betting products.
He said the normal share taken by online bookmakers is 7% to 10% of a stake, however BetDEX needs to enable that to fall below 1%.
The business will establish its own wagering apps to operate on the platform.
Mr Eccles said these would take an "intelligent, thoughtful" technique to the way they are marketed to protect those who battle with problem gaming.
He said the group of around 500 software engineers who helped develop FanDuel from Scotland revealed that it remains the location to construct a company. BetDEX has the same head of technology, Stuart Tonner.
"A great deal of that [FanDuel] success was constructed on a highly skilled, very gifted engineering team, that built this item that could process countless bets and millions of users.
"There's a genuine talent swimming pool of experienced engineers who assisted us develop our product and that's what we wish to utilize for BetDEX also."
