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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 will be available when Novig launches in CO?

Exchange wagering is not currently approved. Until it is, Novig will operate as an Internet Sports Betting Operator. We’ll then transition to offering our full platform as soon as we get the green light from the regulators.

How will Novig make money without charging fees on trades?

We plan to shift the fundamental business model of the industry away from charging users indiscriminately to only charging the greatest winners on the platform. Until the new Exchange Regulations are passed we will primarily generate revenue by operating as an Internal Market Maker, but when we launch our full exchange, we plan to implement with regulatory approval a fee structure for users whose lifetime profits exceed $10,000 and we will begin to productize and monetize our proprietary research and trading models. This business model allows us to provide commission-free betting for the overwhelming majority of our users, while ensuring that our exchange is sufficiently liquid and sustainable.

When will Novig be available?

The best way to stay informed about our upcoming launch is to sign up for our waitlist here.

What types of bets will be available on Novig?

Initially, Novig will support Moneyline, Spread, and Totals markets for MLB, NFL, NBA, NCAAF, and NCAAB matches, and Player Props for professional sports. We’re actively working to begin offering markets for NHL, soccer, tennis, golf, and other sports, as well as other types of bets in the sports we currently support. If there are certain markets you would like to see on Novig, please feel free to reach out at hi@novig.co.