August 18, 2023

Announcing our $6.4M seed round to democratize sports betting ahead of launch in Colorado

Announcing our $6.4M seed round to democratize sports betting ahead of launch in Colorado

Written by: Jacob Fortinsky (Founder & CEO)

We’re thrilled to announce that Novig raised $6.4M in seed funding led by Lux Capital with participation from Y Combinator, Paul Graham, Joe Montana, Soma Capital, Innospark Ventures, Rebel Fund, Bayhouse Capital, Arash Ferdowsi (Dropbox), Austen Allred, Alan Rutledge, Ravi Sheth, Archon Capital, Palm Drive Capital, TRAC, True Culture Fund, CapitalX, and many others.

My co-founder, Kelechi Ukah, and I are honored to have the support of so many of the world’s leading tech investors, who believe in our mission to democratize sports betting for good. Our vision is clear: to reshape the sports betting landscape that has long favored exploitation over innovation, and to usher in an era of integrity, transparency, and empowerment. Together, we’re rewriting the rules and putting the power back in the hands of bettors.

Novig Co-Founders, CEO Jacob Fortinsky and CTO Kelechi Ukah

Each year there is $300B wagered on sports in the US, all of which is bet against retail sportsbooks, which have egregious 7-10% margins, discriminatory and inefficient practices, and a stale betting experience. No matter how good of a sports bettor you are, the house always wins. Even if you think you’re somehow ahead of the game, in reality, you’re just a pawn in theirs.

At Novig, we’re building the first high-frequency, commission-free sports betting exchange. We eliminate the need for traditional sportsbooks by allowing users to bet directly against friends or the market, rather than against the house, making the betting experience more efficient, fair, and, most importantly, profitable. Novig levels the playing field by giving bettors more control over their experience, letting them take best-in-market odds or make their own odds.

Rather than charging retail users, we generate revenue from three main sources: charging institutional traders, data monetization, and internal market making. By shifting away from the exploitative business model that dominates the industry, we seek to build a platform where winners are welcome, and all players have a realistic chance of making money.

We ourselves are avid sports bettors who grew increasingly frustrated by the prices, discriminatory practices, latency, and staleness of the retail sportsbook betting experience, which would all be resolved by a public betting exchange. We aim to innovate the industry with our unique focus on quantitative research and high-frequency trading, and by introducing state-of-the-art financial exchange technology to the industry that has not seen serious technological or product innovation in years.

In preparation for our launch, we ran a successful beta test in early August which saw 200 users compete in a two-week long pre-launch trading tournament where 15,500 orders were placed across 1,290 markets. Our platform provides instant confirmation of live bets, compared to sportsbooks that can take up to 80 seconds for trader approval, and our matching engine is 100x faster than the leaders in the industry.

We have also entered a 10-year market access partnership with Full House Resorts and its Bronco Billy’s Casino property in Cripple Creek, CO. When we go live, NFL, NBA and MLB will be available. Customers will be able to place bets on the Moneyline, Point Spread, Game Totals, and Team Futures, both pre-game and in-game.

We’ve been overwhelmed by the positive reception of our product from Novig’s first users and are excited to bring our product to regulated markets beginning this fall in Colorado. We look forward to welcoming you to Novig’s platform shortly and encourage you to sign up for early access!

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Questions?
We have answers

What is Novig? How does Novig work?

Novig is the first prediction market for sports. We were tired of betting against sportsbooks that take 10% cuts of winnings and limit/ban winning users, so we built a peer-to-peer exchange where you compete directly against other users in the Novig community rather than against the house.

When you place orders on Novig, you are weighing in with your own knowledge, research, and opinions on sports events, so the odds on our platform reflect what the Novig market believes is the fair value of a given event. We are distinct from traditional sportsbooks in that we allow users to offer their own odds (ie, name your own price) if you don’t like the market odds, which you can do by placing a “Make Order” on the Order Slip.  

We have two different modes: Novig Coins and Novig Cash. Novig Coins are unredeemable and are used to play for fun, and Novig Cash is a virtual currency that can be used to enter sweepstakes for the chance to win cash prizes. No purchase is necessary for Novig Cash.

What’s the difference between Novig Coins and Novig Cash?

Novig Coins are used to play for fun. They provide the opportunity to express one’s predictions on sports events, win more Novig Coins, and compete against the Novig community. Novig Coins can be purchased in the Novig App, and they can be claimed daily or when one’s balance is below 100 Novig Coins. They are unredeemable and non-transferable. 

Novig Cash is a virtual currency that is used to participate in Novig's sweepstakes. Novig Cash is free to claim and Novig Cash won from gameplay can be used to enter additional sweepstakes or redeemed for cash prizes, subject to eligibility verification, minimum and maximum redemption limits, and all requirements in the Sweepstakes Rules and Terms of Use.

It can be collected for free as a bonus with purchases of Novig Coins or via one of our alternative methods of entry. No purchase is necessary to obtain Novig Cash. Please see our Sweepstakes Rules for complete details. 

What happens if I win Novig Cash?

If you win Novig Cash by participating in sweepstakes games, you may redeem the Novig Cash for real cash prizes, subject to minimum and maximum redemption limits, but you must verify your eligibility and comply with all requirements, in accordance with our Terms of Use. The current minimum redemption of Novig Cash is $20, and the current maximum redemption of Novig Cash is $5,000 for a single redemption and $10,000 per day, except in New York and Florida where the maximum daily redemption is $5,000.

What are sweepstakes?

Sweepstakes are promotional games with prizes for the winners. They are used to promote the sale of products — in our case, Novig Coins — and have been legitimately used by businesses in the United States for decades. 

Unlike traditional sports betting where you wager real money on sports outcomes, sweepstakes involve no real money gambling. A sweepstakes is a game of chance where participants can win prizes without any requirement to make a purchase. Participants use Novig Cash to play sweepstakes games for the chance to win prizes.

Why use Novig instead of traditional sportsbooks?

We are the platform where winners play. Our research indicates that players are over 10x more likely to win on Novig compared to our competitors. On other platforms, if you are consistently winning, you are likely going to get limited or frozen out entirely. At Novig, winners are welcome. 

We also offer faster in-game trading, more transparency, and a number of innovative features like Make Orders, liquidity screens where you can view multiple levels of the Order Book, position tracking, and a generous rewards program.

What markets does Novig offer?

We offer moneyline, spread, totals, and player prop markets in NFL, NBA, NHL, MLB, NCAAF, NCAAB, NCAAW, and WNBA. In the coming months, we will expand our offerings to include other sports (tennis, UFC, golf, soccer) parlays, SGPs, and other exotic markets.

Is Novig legal?

What does it mean to “set your own odds”?

On Novig, you don’t have to just take the odds that the market is offering. You can set your own. 

For example, let’s say you want to put 1000 Novig Coins on the Cowboys to win against the 49ers and you see that the best odds are currently -330 for 49ers and +240 for the Cowboys. Instead of just taking the Cowboys at +240, you can change your Order type to Make on the Order Slip, and enter in whatever odds you’d like, say +300. 

Those odds are then offered to the rest of the Novig community so the 49ers odds would update to -300 and when another player on the app takes the other side, you will be notified that your order is filled and your payout would be 4000 Novig Coins, instead of 3400. If your order remains unmatched, it will be canceled automatically when the game starts, or you can cancel it from the Portfolio screen at any time and the Coins will be returned to your wallet.

Where is Novig available?

Novig is available to users 21+ across the United States, except in the following states: AL, CO, ID, LA, MI, MT, NV, and TN. Eligibility may vary month-to-month, and you are responsible for determining whether you are located in an eligible jurisdiction. For more information on eligibility and availability, see our Terms of Use and Sweepstakes Rules.

How does Novig actually make money?

It's a great question and one that gets to the heart of how we're different from traditional sportsbooks. Our revenue model is actually quite simple. We make money in two ways.

First, we act as a market maker on our own platform. That means in addition to letting users trade directly against each other, we're also providing liquidity and acting as a participant in the market. This helps keep markets active even when user liquidity is low and solves the “cold start problem” from day one. 

In other words, if you want to participate in a niche market where there isn’t any counterparty, we will serve as the counterparty. In the most liquid markets — like NFL moneyline markets — we expect the vast majority of trades to be directly peer-to-peer where we don’t take a cut, but in less liquid markets, we expect most trades will be against Novig, where we will have 1-4% spreads. 

Second, for our highest volume users - think professionals and hedge funds - we have a fee structure. But for the vast majority of users, we're not taking a cut at all. When two users play against each other, we're not touching the winnings. That means if you put up 100 Novig Cash and your buddy puts up 150 Novig Cash, the winner gets 250 Novig Cash, whereas on virtually any other platform the house would take 8-10% of the winnings, so you’d only get 230. 

This is a complete paradigm shift in the industry. We're the only platform in the world that doesn't take a cut from most of our users' winnings. It's a game changer, and it's at the core of our mission to build the fairest, most transparent platform possible.

How can I connect with other players in the Novig community?

Join our Discord server here!

Do you have a customer support team?

We do! Reach out to us via Live Chat or email support@novig.co, and you’ll be connected with one of our customer support reps.