Florida Funders wagers $2.1 million on micro-betting startup

With the rise of platforms like FanDuel and DraftKings, sports gambling has moved beyond casinos and racetracks and into the palms of bettors’ hands. And as more states begin to allow sports betting — thanks to a landmark Supreme Court decision in 2018 — the industry has attracted innovators and disrupters like Simplebet, a tech startup that specializes in software that powers “micro-betting,” a form of wagering that lets fans place bets on highly specific events in the course of a game, such as whether a baseball player will strike out, walk or hit a home run.

More than a dozen states have already legalized sports betting, and although Florida is not one of them, that hasn’t stopped Florida Funders, a Tampa-based venture capital firm, from investing $2.1 million in Simplebet, which is headquartered in New York but has a strong presence in the Sunshine State thanks to one of its founders, Joey Levy, being based in Miami.

Simplebet, Florida Funders Managing Partner Tom Wallace told the Catalyst, is not a customer-facing service like DraftKings; instead, it counts such companies as customers, licensing its micro-betting technology to them on a software-as-a-service model. It has already landed FanDuel, PointsBet and INTRALOT as clients, Wallace said, adding that Florida Funders’ Fund 2 contributed $500,000 in funding while the rest came from the firm’s accredited investor network.

Florida Funders Managing Partner Tom Wallace

“We think it’s a very exciting market and these guys are off to a good start,” Wallace said. “Not only is it a new market; it’s a huge market. About 80 percent of all sports betting takes place in four sports: the NFL, NBA, Major League Baseball and NHL, and they’ve cut deals with all those leagues or are close to deals with those leagues.”

What makes Simplebet’s technology truly innovative, Wallace said, is how it uses machine learning to adjust betting odds on the fly, raising the stakes, pun intended, for sports fans who care more about just wins and losses.

“Let’s say you bet that a batter is going to strike out,” he said, “and the pitcher starts off by throwing two balls. The odds change, because now the batter is less likely to strike out; they’re more likely to walk. So the odds change and you can bet again. In football, you can bet on how many yards are they going to gain on this drive, are they going to make a first down, things like that. It makes the sporting event much more engaging. It becomes less of a passive thing where you, as a fan, are engaged and participating.”

But unlike traditional sportsbook betting, a micro-betting service like Simplebet’s, Wallace said, doesn’t allow gamblers to place large wagers.

“You can’t bet a million dollars on whether a guy is going to strike out or hit a home run,” he said. “You might be able to spend, like, 10 bucks. It’s not meant to compete with Vegas betting.”

Wallace said the strong track records of Levy and co-founders Chris Bevilacqua and Scott Marshall also gave Florida Funders a lot of confidence in Simplebet’s business model and value proposition. Marshall, for example, is a veteran of sports, tech and broadcasting, having held executive roles at ESPN Classic, iHeartRadio, Broadway Video Entertainment and NFL On Location Experiences. He and Bevilacqua co-founded ActionX, a marketing and advertising company that specializes in mobile and cross-screen ads and promotions for top brands.

Bevilacqua’s resume is just as impressive. He was an early investor in tech sensations such as StubHub, Lyft and AirBnb, in addition to founding CSTV Networks, which was acquired by CBS in 2006 and is now known as CBS Sports Network. Levy, meanwhile, co-founded and was the CEO of Draftpot, a daily fantasy sports platform, which was acquired in 2017, the year before he teamed up with Bevilacqua and Marshall to launch Simplebet.

“They have extensive backgrounds in sports entertainment,” Wallace said, “and they’re very well connected within those circles. And they’re seasoned entrepreneurs — this isn’t their first rodeo.”