Venture capital firm, Sharp Alpha Advisors, which specializes in sports betting, closed its first $10 million fund. Comes as investors fork over record capital to gain a foothold in the growing industry. The group has finished 11 investments so far, including motorsport fantasy operator GridRival, and gambling exchange Prophet.
Sharp Alpha Fund 1 expects to use half of the $10 million on its initial commitments with the remainder for follow-on investments into those companies with the most promise, according to Sportico.
The fund has a two-pronged approach, said managing partner Lloyd Danzig, a former bond trader who launched Sharp Alpha Advisors in early 2019. Sports betting operators are licensing technology instead of building it, for one thing. And sportsbooks have a market beyond betting on sports such as tickets, trading cards and merchandize.
Sharp Alpha Advisors offers both capital and advice, one of the few venture firms doing both.
The fund targets average allocations of $250,000 in Series A and seed financing, with plans to provide follow-on support in subsequent rounds, according to Sports Handle.
“We are backed by some of the largest VC funds in the entire world, ones that everyone has heard of, and that’s important because that is what allows us to help guide our portfolio companies,” Danzig said. “Not just in the seed and Series A rounds that we’re participating in, but then hand off those portfolio companies to our backers who are the experts in Series B, Series C, IPO and beyond.”
Sharp Alpha also allows limited partners to invest additional capital in select deals alongside the fund.
The group is doing due diligence on a second round of investments.
“My guess is that those will open up early next year, when we’re done making the initial investments out of fund one,” Danzig said.
Prophet, a peer-to-peer U.S. sports betting exchange, announced the launch of a pre-registration period for ProphetExchange.com in New Jersey. The company appointed Matt Garrigan as its vice president of strategy.
