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Good morning, Term Sheeters. Jackson Fordyce here, filling in for Jessica.
Sports fans have all had the experience of seeing an amazing athlete at the start of their career and just knowing they’re going to be a star. Now, a new company wants to let users put money on it. Mojo, a sports betting app that’s currently in beta and plans to launch in the fall of 2022, will allow users to bet on professional athletes like they would a stock. The founders say the app will be available in states where sports betting is legal (but have declined to specify which states). Initially users will be able to put money down on NFL players, but the group has ambitions to expand to other sports. Mojo, which is headquartered in New York, recently raised $75 million in Series A funding from Thrive Capital and Tiger Global. Mojo co-founders Marc Lore and Alex Rodriguez also joined in the round. I got on a call with Mojo co-founder and CEO Vinit Bharara about this interesting—and potentially lucrative—slice of the growing market for betting on sports.
Term Sheet: Tell us about Mojo
Bharara: It’s a new sports stock market, where you can bet on professional athletes like stock. So, it’s really the ultimate futures bet, because it’s a bet on the career of a player, but with 24/7 guaranteed liquidity, where there’s always a price you can enter or exit your position. Your cash isn’t tied up and the prices move based on a player’s statistical performance on the field. And you use your sports knowledge to win. You go long and when a player plays better than expected to, you win. You go short and a player plays worse than expected, you win. Basically, it should look and feel like a Robinhood or a Coinbase, but instead of companies and crypto, you’re betting on athletes that you know and that you can watch play.
How did you get into this space?
My childhood best friend growing up—you may know him, Marc Lore—is a current part owner with Alex Rodriguez and the Minnesota Timberwolves. We did a bunch of companies together. We sold one called diapers.com to Amazon. But the first company we ever did was in sports, and it was in the late 90s called The Pit. We had the same idea, where we wanted to create a sports stock market for the everyday sports fan. But at the time, when we talked to counsel, they said “listen, this would be gambling, sports wagering, and that’s not legal right now.” So, we created what we thought was the next best thing. We created a sports card stock market, where we used sports trading cards as proxies for the athlete. And very similarly, you could trade them like stock, and it was really successful. We saw a lot of demand, users loved it. We built a whole trading infrastructure and came to understand this market and then we sold that to the Topps company.
Then fast forward 20 years later, to 2020 and Mark called me and said “hey, you know now with the emergence of online gambling, we can do the idea like we always wanted to.”
How does the algorithm determine a player’s value?
The key here is they’re really betting on a cumulative career statistic. So, every sport is going to have a cumulative statistic that kind of aggregates several box score stats to try to represent the relative excellence of a player. In any sport, that’s what they’re betting on. And then prices move, because at any given point in time, that price is the latest projection of that player’s career. That’s kind of how it works, you get in and think this player’s price is too low. I think this player is going to do better than what they’re projecting for their career. And then that player plays and if he starts doing better, the price is going to go up, and vice versa.
Are there things that happen off the field that affect that price as well?
Well, lots of things can affect what that ultimate career is going to be like, whether they get traded, or who their teammates are, or whether they’re going to have playing time. So, lots of things can determine how a player is going to perform statistically for their career.
You mentioned instant liquidity. How are you able to provide that to your users?
Folks are going to be making a bet or trade on the career of a player that’s way in the future. You need to make sure that they can always get in and out of their position at all times. They don’t want to have the money tied up, right? But it is extremely hard to do because every trade is made with us. So, our team is basically adjusting prices in real time, based on the latest projection of a player’s career. And as a result, that’s why we need to have this incredible team of data scientists and market makers to do this right.
We’ve seen a lot of these sports betting applications and platforms in the past do well at the start, and then kind of fizzle out. How’s Mojo different?
We have over 50 folks now that are best in class across every area. And then I think it’s a super differentiated product. I don’t think there’s anything else out there like it in sports betting, and I think to win in the space, especially now, you’re going to need to do it with product differentiation. And so that’s our strategy.
What do you predict in terms of legalization of sports betting?
Ultimately I think we’ll see every state be legal in the next few years, and then there will be a massive, massive market.
Better.com gets even smaller… Just one month after digital mortgage company Better laid off thousands of its employees, the company has initiated a voluntary resignation program for remaining U.S. corporate and product staffers, according to a letter sent to employees yesterday seen by Fortune. The company’s size has been dwindling, and the status of the company’s SPAC merger is in limbo. You can read more about that here.
Paying it back… Sky Mavis, the Vietnam and Singapore-based company that created Axie Infinity, has raised funds to reimburse victims of its major crypto breach, where hackers stole more than $620 million in cryptocurrency in what was the second-largest crypto hack of all time. Sky Mavis raised $150 million in funding led by Binance and was joined by investors including Animoca Brands, a16z, Dialectic, Paradigm and Accel.
A bootstrapped unicorn… Nord Security, a Lithuania-based internet privacy and security solutions company, has raised its first outside capital ever after 10 years in the business and scaling to 1,700 employees. The company recently raised $100 million in funding in a round led by Novator Ventures that has valued the company at $1.6 billion.
See you tomorrow,
Jackson Fordyce
Email: jackson.fordyce@fortune.com
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VENTURE DEALS
– Improbable, a U.K.-based metaverse technology company, raised $150 million in funding co-led by Andreessen Horowitz and SoftBank Vision Fund 2 and were joined by investors including Mirana, DCG, CMT, SIG, and Ethereal Ventures.
– Grover, Berlin-based electronics rental platform, raised $110 million in Series C funding led by Energy Impact Partners and was joined by investors including Korelya Capital, Mirae Asset-LG Electronics New Growth Fund, Viola Fintech, Assurant, and coparion.
– CAIS, a New York-based alternative investment platform, raised $100 million in funding from Reverence Capital Partners.
– Productsup, a Berlin-based commerce software company, raised $70.9 million in Series B funding led by Bregal Milestone and was joined by Nordwind Capital.
– Fidel API, a London-based financial infrastructure platform, raised $65 million in Series B funding led by Bain Capital Ventures and was joined by investors including NYCA Partners, QED Investors and others.
– Lilt, a San Francisco-based translation software and services company, raised $55 million in Series C funding led by Four Rivers and was joined by investors including Sorenson Capital, CLEAR Ventures, Wipro Ventures, Sequoia Capital, Intel Capital, Redpoint Ventures, and XSeed Capital.
– Ellevest, a New York-based female-focused digital investment platform, raised $53 million in Series B funding. BMO and Contour Venture Partners co-led the round and were joined by investors including Halogen Ventures, Cleo Capital, New York Ventures of Empire State Development, Stardust Equity, The Venture Collective, Envestnet, and Gaingels.
– Ascend.io, a Menlo Park, Calif.-based data automation company for engineering, raised $31 million in Series B funding led by Tiger Global and was joined by investors including Shasta Ventures and Accel.
– InvestorFlow, a Menlo Park, Calif.-based investor portal for alternative asset managers, raised $30 million in Series A funding from Ambina Partners. As part of the deal, InvestorFlow is merging with Cloud Theory, a CRM software platform for alternative asset managers and investment banks.
– Rattle, a San Francisco-based revenue automation platform for sales teams, raised $26 million in Series A funding led by Insight Partners and was joined by investors including GV, Sequoia Capital India, and Lightspeed.
– vHive, a Herzliya, Israel-based software company using autonomous drones to capture data, raised $25 million in Series B funding led by PSG and was joined by investors including Octopus Ventures and Telekom Innovation Pool.
– Loaded, a Santa Monica, Calif.-based talent management and marketing firm for gaming content creators, brands, and game developers, raised $20 million in funding led by Coral Tree Partners.
– Venus Aerospace, a Houston-based hypersonic aircraft developer, raised $20 million in Series A funding led by Prime Movers Lab.
– Endel, a Berlin-based sound wellness company, raised $15 million in Series B funding led by Waverley Capital and True Ventures.
– Instoried, a Bangalore, India-based online writing platform, raised $10 million in Series A funding led by Pritt Investment Partners and 9 Unicorns and was joined by investors including Mumbai Angels, SOSV, Venture Catalysts Angel Fund, and others.
– Gaviti, a Tel Aviv-based automated accounts receivable collections platform, raised $9 million in Series A funding led by Flashpoint.
– Finkargo, a Bogota, Colombia-based import finance platform, raised $7.5 million in seed funding. Quona Capital and MAYA led the round and were joined by investors including OneVC, FlyBridge, Pear VC, Latitud, Angel Ventures, and others.
– Novel, a New York-based Web3 commerce platform, raised $6 million in seed funding led by Lerer Hippeau and was joined by investors including VaynerFund, Rothy’s founder Roth Martin, Sugar Capital, and Costanoa Ventures.
– Starlight, a New York-based crypto management platform, raised $5 million in seed funding. Abstract and A* Capital co-led the round and were joined by investors including BoxGroup, SV Angel, Brevan Howard, Paxos, former Coinbase CTO Balaji Srinivasan, Plaid co-founder William Hockey, Solana co-founder Raj Gokal, and others.
– Legendary Play, a Berlin-based esports-themed mobile games developer, raised $4 million in funding co-led by BITKRAFT Ventures and MTG and was joined by investors including 1Up Ventures and Level Up.
PRIVATE EQUITY
– Alter Pharma, a portfolio company of The Riverside Company, acquired a majority stake in EcoPharmaSupply, a Estaimpuis, Belgium-based pharmaceutical services and product company. Financial terms were not disclosed.
– Aqua-Leisure Recreation, backed by Blackford Capital, acquired INYO Pool Products, a Longwood, Fla.-based swimming pool repair and maintenance products provider. Financial terms were not disclosed.
– Brook + Whittle, backed by Genstar, agreed to acquire the Custom Labels Group within Cenveo, a Jersey City, N.J.-based printing company. Financial terms were not disclosed.
– BV Investment Partners acquired a majority stake in Source Advisors, a Fort Worth, Texas-based specialty tax solutions and software provider focused on the SMB market. Financial terms were not disclosed.
– Direct Connect Logistix, a portfolio company of Huron Capital Partners, acquired Hoosier Logistics, an Indianapolis, Ind.-based logistics and supply chain services provider. Financial terms were not disclosed.
EXITS
– Applied Composites Holdings, a portfolio company of AE Industrial Partners, acquired North Coast Tool & Mud, a Cleveland, Ohio-based designer and manufacturer of molds and tools for the aerospace industry, and North Coast Composites, a Cleveland, Ohio-based manufacturer of composites for aerospace production, from Unitech Holdings. Financial terms were not disclosed.
– Millennium Trust Company agreed to acquire PayFlex Holdings, an Omaha, Neb.-based health savings accounts and benefit administration services provider, from CVS Health Corporation. Financial terms were not disclosed.
OTHER
– Euronav, a Antwerp, Belgium-based oil tanker, and Frontline, an Oslo-listed oil tanker, plan to merge in an all-stock transaction. A deal would be valued at $4.2 billion.
– Bolt Financial agreed to acquire Wyre Payments, a San Francisco-based crypto infrastructure payments firm. The deal is valued at around $1.5 billion, according to the Wall Street Journal.
– Pfizer agreed to acquire ReViral, a Hertfordshire, U.K.-based respiratory antiviral developer, for as much as $525 million.
– Equilibria acquired Fleur Marché, a Los Angeles-based CBD products provider. Financial terms were not disclosed.
– Real Chemistry acquired conversationHEALTH, a Toronto-based conversational A.I. platform financial terms were not disclosed.
IPOS
– CI Financial, a Toronto-based financial services company, plans to sell 20% of its U.S. wealth management business in an IPO in the U.S. later this year.
– Israel Postal Company, a government-owned Jerusalem-based postal service company, is planning to IPO on the Israel Stock Exchange for 40% of the company by the end of the year, according to Bloomberg.
FUNDS + FUNDS OF FUNDS
– 5AM Ventures, a Boston and San Francisco-based venture capital firm, raised $450 million for a fund focused on life science companies and $300 million for a fund focused on portfolio and non-portfolio companies.
PEOPLE
– Antler, a Singapore-founded venture capital firm, promoted Rosalind Bazany to head of ESG and impact.
– Crossplane Capital, a Dallas-based private equity firm, promoted Mike Sullivan to partner.
– Partech, a Paris-based investment firm, promoted André François-Poncet to partner and hired Elena Moneta as principal in the venture team. Formerly, Moneta was with Hambro Perks.
Financial Services
