DeFi set to define betting exchanges as start-up BetDEX wins $21m funding

It is 20 years since the gambling industry was shaken up by the advent of peer-to-peer (P2P) betting exchanges, but the next wave of innovation may finally be about to break.

Edinburgh-based BetDEX announced today it had secured the largest ever seed funding round for a UK start-up ($21m), as it aims to become the world’s first decentralised sports betting protocol, with a launch date of the first half of 2022.

The company is chaired by Nigel Eccles, who co-founded the fantasy sports operator FanDuel in 2009, and its team includes veterans of Flutter.com, the original P2P sports betting exchange. That merged with Betfair in 2001, which merged with bookmaker Paddy Power five years ago, which acquired FanDuel in 2018 and then renamed the group Flutter Entertainment in 2019 to complete the circle.

Betting exchanges allow punters to become bookmakers, offering their own odds on outcomes, as well as taking the odds offered by fellow players for a horse, team or individual to win or lose. Betfair charges a 2 to 5 per cent commission on winnings, but BetDEX says it will be able to reduce commission on exchanges it enables to less than 1 per cent, using blockchain technology.

While the company is planning its own exchange, its platform will enable others to do the same. “Because BetDEX is a permissionless protocol, it means other entrepreneurs can build their own betting applications on it, ” Eccles told me. “That could be a simple sportsbook focused on ping-pong or a full betting exchange for football.”

So this adaptation of decentralised finance (DeFI), built on the public blockchain Solana, opens up the possibilities of many new businesses and products catering to fresh niches and audiences, although their success will depend on popularity creating sufficient liquidity.

The investment round is led by the San Francisco crypto VC firm Paradigm and Bahamas-based cryptocurrency exchange FTX. We revealed on Monday that Paradigm has just raised the biggest ever crypto VC fund, amounting to $2.5bn. Investment partner Arjun Balaji said today: “It feels obvious crypto will transform online sports betting. DeFi has shown how financial markets can be automated and distributed to the benefit of consumers. Crypto can do the same for all other kinds of financial activities, including betting.” 

The Internet of (Five) Things

1. Apple to let you fix your iPhone
Apple will allow customers to repair their own devices in a move that could bring down the cost of fixing iPhones and Macs and extend the lifecycle of consumer electronics. In a boost for the Right to Repair movement, Apple on Wednesday launched a self-service repair programme that would allow customers to purchase Apple-made components to replace worn out or broken parts.

2. Apple and Google probed on child protections
Dozens of tech companies including Google and Apple have been contacted for explanations by the UK’s data protection regulator, after an investigation alleged they were systematically endangering children online and breaching the UK’s new Children’s Code.

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3. Imagination readies for markets return
Imagination Technologies is appointing banks to advise on a flotation next year as its Chinese-backed owners prepare to exit. The British semiconductor designer, which specialises in graphics technology that is used in most of the world’s smartphones including the Apple iPhone, is preparing to list either on the London or Nasdaq exchanges four years after it was taken private.

4. Rivian and Lucid overtake VW and Ford
The electric vehicle company Rivian has overtaken Volkswagen in market value, while rival start-up Lucid surpassed Ford, as shares in their largely unproven businesses continued to soar. The US bank JPMorgan has sued Tesla for $162m, alleging it failed to make a required payment that was triggered after chief executive Elon Musk’s 2018 announcement that he was considering taking the company private. Lex explains it is all about how a Musk tweet affected a strike price.

5. Netflix starts reporting Top Ten
Netflix will begin regularly reporting viewership numbers for its top programmes and films, a major shift in strategy for the streaming company that has carefully guarded its data over the past decade. In its first release of viewer numbers for its top 10 shows and movies, Netflix said this was led last week by subscribers spending 149m hours watching Red Notice, the action film starring Gal Gadot.

Tech tools — Wearables get healthier

Patrick McGee takes review comparisons seriously. “I’ve felt a bit ridiculous meeting people recently, even on Zoom calls. I’m sporting two smartwatches on my left wrist, an activity tracker on my right, and one of my fingers is adorned with the same smart ring worn by Kendall Roy, the spoiled wannabe tycoon on HBO’s Succession,” he says.

A number of wearables are emerging that boast days of battery life and, with ever more impressive sensors, are beginning to shift from activity trackers to all-round health monitors. Among them is the third-generation Oura, a discreet ring that lasts up to seven days; the Whoop 4.0, an elite athlete activity tracker with a five-day battery life; and the Amazfit GTR 3 Pro, a fully featured smartwatch that lasts between 10 and 14 days on a charge. Find out which one he found to be the most accurate.