Three former FanDuel executives have secured a $21m seed investment ahead of launching what they claim is the world’s first decentralised sports betting protocol.
BetDEX secured one of the largest funding rounds by a UK start-up from investment firm Paradigm and cryptocurrency exchange FTX. Multicoin Capital, Hack VC, Lightspeed Venture Partners, Sino Global Capital, Solana Ventures and Everblue Management also participated in the round.
The business is set for launch in the first half of 2022 and aims to combine blockchain technology with sports betting.
Former FanDuel chief executive Nigel Eccles has become BetDEX’s non-executive chair, while Varun Sudhakar is its chief executive and Stuart Tonner is chief technical officer.
BetDEX plans to scale the business from a base in Scotland and is now hiring for a range of positions.
Eccles co-founded FanDuel in 2009, with the company going on to become Scotland’s first $1bn-valued start-up, before being acquired by Flutter in 2018.
FanDuel is now estimated to be worth around $30bn.
Sudhakar, who began his career in investment banking in Silicon Valley, worked alongside Eccles in senior strategy and corporate development roles at FanDuel between 2015 and 2018, before going on to senior executive positions at other start-ups in New York.
Tonner was the first engineer hired by FanDuel, spending more than eight years with the company, building the platform and scaling it to tens of millions of users.
In 2020, the global sports betting market was valued at $203bn and is forecast to grow to $350bn by 2024.
BetDEX’s protocol will be built on public blockchain Solana, offering low-cost trades, while eliminating counterparty risk. The protocol will be decentralised and open-sourced, allowing third parties to build their own applications on top of the platform.
BetDEX plans to accept wagers in US Dollar Tether (USDT), Solana (SOL) and Samoyed coin (SAMO) at launch.
Eccles said: “Blockchain technology is set to revolutionise sports betting and we want to be at the forefront of that - it’s exciting to be founding the business with Varun and Stuart, and to be building it in Scotland.”
Sudhakar added: “The sports betting industry charges high prices for poor products and limits trades by its most successful users - BetDEX is diametrically opposed to this approach, so we will successfully compete against incumbents with a markedly superior product and low fees, which is now possible with the advent of blockchain technology."
Arjun Balaji, investment partner at Paradigm, commented: “It feels obvious crypto will transform online sports betting.
“The BetDEX team has the right combination of industry experience and technical skill to create something that shows the way forward for everyone working in the space.”
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