Social betting platform Betmate raises $2m seed round

The United Kingdom’s mature sports betting market has contributed much to its upstart American counterpart: ideas, habits, cautionary tales.

Now, Liverpool-based Betmate is bringing a uniquely American taste back across the Atlantic Ocean. A recently announced $2 million seed round will help the four-year-old company introduce the UK to the type of player-versus-player fantasy sports-style social competition that thrived in the U.S. long before the tumble of the Professional and Amateur Sports Protection Act in 2018. It actually has thrived in the UK, too, Betmate co-founder Ryan Lawrence told BettingStartups.com, but his company aims to “digitize” the experience off Excel spreadsheets and WhatsApp chats.

“We say ‘join the social betting revolution,’ and then you have to educate people about what the social betting revolution is,” Lawrence said. “We're really looking at that and thinking, ‘OK, we want to position Betmate as the social betting revolution, not join the social betting revolution in the UK.”

For Lawrence and co-founder Declan Dowling, the idea for Betmate sprung from the informal soccer leagues they’d long played with friends. After interviewing hundreds of their competitors and potential future Betmate customers about their wagering and fantasy habits, the co-founders were able to hone which of their ideas would have an audience. 

“It became obvious there was a place for DFS in the UK because people found fantasy Premier League very time consuming,” Lawrence said. “They found  that by October, 50% of people were inactive, no longer played. It was the same people winning again.”

Currently, Betmate offers DFS-style pick ‘em and user- or in-house-generated contests on major European soccer leagues. There are plans, Lawrence said, to add horse racing early this year and a third undecided sport around August. Betmate’s business-to-business arm, Engage Games, will tap into some of the funding for further expansion, also.

The seed round was led by one of the first investments by sports tech venture capital concern Accelerate, which is run by Wigan Athletic owner Mike Danson.

“That’s been a couple of years in the making for them,” Lawrence, 27, said, “and obviously [they] have figured out their whole strategy. They've brought a whole team with them, and obviously being one of their first investments, I felt like it was going to go one of two ways: either it's going to be plain sailing, or it's going to be kind of a lot of homework, due diligence, et cetera. [It was] more the latter. But I think that was in a way quite nice, because it shows you obviously they're diligent people, and they're the type of people that you want to be involved in your company.”

A bid to differentiate is apparent in Betmate’s online advertising, which features prominent shots across the bow of some old-guard UK sportsbooks. Again with an eye to the US and its current post-mainstream sports betting hangover, Betmate has found another way to position itself as an alternative.

“I think we certainly want to be seen as different. We want to be seen as more fun, more social, more responsible,” Lawrence said. “We actually cap the amount that you can bet on that night. We've never really gone above £20 buy-ins. So it's always been fairly low stakes. The average contest entry fee is about £5. So we're really keen on responsibility.”

Lawrence met Dowling while each, coincidentally, worked for an early-stage venture capital accelerator that sought out companies like their eventual project. Lawrence managed accounts while Dowling came from a tech background, but had some experience in the gambling industry.

With the company established, they decided to go about raising capital and traversing the complicated UK Gambling Commission licensing procedure on their own. At the end of the first year, they’d raised enough funds to acquire their first gambling license and launch a fantasy soccer product.

“Taking a lot of inspiration from the States, in terms of DFS culture over there, it's almost been a little bit in reverse,” Lawrence said, “which has been really interesting from afar. But there's a lot of things that we can learn from DFS in the States, and also failures coming over to the UK.”

Betmate now features five unique games: fantasy soccer, a score game, goal-scorer game, full-time and a survivor contest.

“There's a lot more kind of predictor-style games that we've added, which has been really good for us,” Lawrence noted. “The struggle with a social betting platform is that you're going to potentially struggle with the frequency of bets because people can only bet on one game type, and sometimes that means you're limited.

“Whereas with a sportsbook, the value of a sportsbook is the variety. And as a punter in the UK, you can bet on anything at any time. And obviously for bookmakers, that means that there's revenue coming through the door all the time. I think the challenge with social betting, sweepstakes, anything that's people-versus-people is the frequency. So I think having multiple game types is really important, rather than just having DFS, for example.”

The revolution is underway.