Sport Betting & Gaming: as a first investment, Sharp Alpha Fund is a no-brainer

Since the launch of the Dutch Sport Tech Fund in April 2021, Sharp Alpha has already taken 12 stakes. DSTF is regularly offered co-investment opportunities. Sports betting and gaming is one of the segments that the Dutch Sport Tech Fund (DSTF) sees as an exceptional growth market. Sharp Alpha is a specialist from whom we can learn a great deal. Globally, growth in this segment will continue to increase due to the growing acceptance of both sports betting and gaming.

We do not consider all co-investment opportunities, as we make our own assessments. For example, synergy opportunities with other portfolio companies are a basic requirement. We also apply our own social standards regarding sports betting. If sports betting supports fan engagement and enriches the viewing experience, we find it interesting.

According to Dutch Sport Tech Fund, the social aspect and the game element should take precedence, not financial gain. There must also be clearly programmed limits on financial transactions. Actively encouraging people to continue or spend more is out of the question. We also find technological innovations that improve the processes (for the fan) around sports betting to be an interesting niche.

The American sport tech market as a whole, and the sports betting segment in particular, are ahead of the rest of the world in terms of acceptance, volume, and the number of mergers and acquisitions. The sector is young, and the costly rapid growth means that few companies are profitable yet. Nevertheless, based on future projections, unprecedentedly high multiples (often based on revenues and/or user numbers) are paid in M&A transactions.

DSTF has decided to invest in a specialized American sports betting fund. The Sharp Alpha Fund was established due to “extraordinary market conditions,” namely the aforementioned explosive growth of the American sports betting market (and ecosystem). This year, that growth will exceed 100%. These market conditions also make successful exits of other DSTF portfolio companies more likely. As the American sports betting market explodes, they benefit as well.

The Sharp Alpha Fund primarily focuses on the following market segments:

• Betting Intelligence,
• Data & Analytics,
• Social Betting &
• Gamification,
• Sustainable Gaming

Read here our policy on investing in sports betting