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Sharp Alpha Fund Raises $10 Million For Sports Betting Startups

The investment dollars keep on flowing into US sports betting. Increasingly, they are going beyond the public markets to the private sector.

New York-based Sharp Alpha Fund I announced earlier this month it raised $10 million to invest in early-stage US sports betting technology companies.

Led by managing partner Lloyd Danzig, the fund already invested in 11 startups, averaging around $250,000 per investment.

Making the most of sports betting M&A mania

Danzig said the fund was investing in companies that could ultimately be acquired by larger operators and providers.

“Market leaders are choosing to buy rather than build at every turn,” Danzig said.

“With M&A, the primary mechanism through which market leaders achieve differentiation and vertical integration, it is a great time to underwrite next-gen infrastructure.”

Where has the fund invested?

Initial investments for Sharp Alpha Fund I include:

  • Players’ Lounge: A platform that lets video gamers bet on themselves in esports contests.
  • GridRival: A fantasy platform for motorsports.
  • PickUp: A tool allowing publishers to embed prediction games in their content. 
  • Prophet: A peer-to-peer betting exchange.

Who is backing Sharp Alpha Fund?

The fund is backed by several institutional investors, including Great Elm Group and the Dutch Sport Tech Fund. It also has private investors from listed sports betting companies, investment banks and hedge funds.

Those investors could be valuable resources for startups, Danzig said.

“Through its extensive limited partner network, Sharp Alpha connects portfolio companies directly to the sources of revenue, brand awareness, and future funding that are critical to a startup’s success,” the fund said in a statement.

The company also revealed its advisory board, including:

  • Don Kornstein, the Vice Chairman of Caesars Entertainment
  • Keith Horn, previously Global Head of Leveraged Finance at Merrill Lynch.
  • Emanuel Pearlman, the former Chairman of Empire Resorts.

Funding flowing for sports betting startups

The news comes just a week after another US sports betting fund Bettor Capital closed its first round of capital commitments.

That venture fund will also focus on early-stage tech companies, albeit with a focus on the B2B side of the industry.

Philadelphia-based 76 Capital also recently launched a new fund with exposure to early-stage sports betting companies.

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