Commission-free exchange Novig raises $6.4m in pre-seed round

Commission-free sports betting exchange Novig has raised $6.4m (£5.0m/€5.9m) in a pre-seed funding round from a number of well-known tech investors.

New York-based firm Lux Capital led the investment round into Novig, with participation from several prominent Silicon Valley venture capitalists.

These include famous start-up accelerator Y Combinator, the inventor of the Lisp programming language Paul Graham and Dropbox co-founder Arash Ferdowsi. Also investing is former San Francisco 49ers quarterback Joe Montana.

Novig CEO Jacob Fortinsky said the business was “honoured” to have the support of the tech investors.

“Our vision is clear: to reshape the sports betting landscape that has long favoured exploitation over innovation and to usher in an era of integrity, transparency and empowerment,” he added. “Together, we’re rewriting the rules and putting the power back in the hands of bettors.”

Novig plans October launch date

Novig completed the investment round ahead of the planned launch in its first US state – Colorado – this October.

For market access, Novig entered into a 10-year partnership with Full House Resorts and its Bronco Billy’s Casino property.

This follows the completion of the exchange’s beta test in autumn 2022. This saw 200 users compete in a two-week-long pre-launch trading tournament involving 15,500 orders in 1,290 markets.

Novig said the platform provides instant confirmation of live bets. The exchange also claimed its matching engine operates 100x faster than leaders in the industry.

“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,” said Fortinsky.

At launch players will be able to place both pre-game and in-game bets on the NFL, NBA and MLB. Novig said it will offer Moneyline, Point Spread, Game Totals and Team Futures bets.

The US sports betting exchange landscape

Novig is just the latest sports betting exchange to attempt to bring peer-to-peer betting mainstream in the US.

In April, New York-based Prophet Exchange announced it had received $10.0m in new funding. It said this was to support the growth of its tech offering. This followed its launch in August 2022.

New Zealand-based online prediction market PredictIt, which had previously been cleared to allow users to place bets on non-sporting events, lost its authorisation to do so in February 2023.

However, the world’s largest exchange, Flutter-owned Betfair, proved unsuccessful at breaking into the market.

In September 2020, after four years of operation, it decided to exit its only live market – New Jersey – due to low customer numbers.

As a peer-to-peer exchange, the operators need significant liquidity in order to be viable, a problem some exchanges have struggled with in ring-fenced US markets.

Original Article