Social sports betting app Wagr has secured $12 million in a new Series A round featuring high-profile investors, including Kraft Group, owners of NFL’s New England Patriots and soccer team New England Revolution; and Harris Blitzer Sports & Entertainment, owners of NBA’s Philadelphia 76ers and NHL’s New Jersey Devils.
Other investors in the round included venture capital firms such as BITKRAFT Ventures, Greycroft, Pear VC and Seven Seven Six, founded by Reddit co-founder Alexis Ohanian, reports Forbes. The $12 million secured in the round will be used to fund the costs associated with expanding to new states.
Wagr first received approval to launch on August 31 in Tennessee, its first state in the US. The social sports betting app has a system that requires two people to place a bet and choose one side of it, but both bets are placed with Wagr itself. It is a different model from traditional operators like casinos or market giants like DraftKings or FanDuel, which take the other side of people’s bets.
Congratulations to @ma_malave, @eliana_eskinazi, and the entire @withwagr team on their successful raise and market launch in Tennessee! Starting today, sports fans in Tennessee can download the Wagr app on iOS and Android. Check them out!https://t.co/VBBH6UoNdp— BITKRAFT Ventures (@BitkraftVC) January 20, 2022
While somewhat similar to P2P betting, by being placed within the platform the bets count to adjusted gross income that can be calculated the same as other sportsbooks. Wagr also sets the odds, another key differential factor from peer-to-peer betting, and charges a flat 5% transaction fee based on betting volume to generate revenue.
The app was developed by Mario Malave and Eliana Eskinazi in 2019, as second-year students at Harvard Business School. The product was conceived as “a fun, inclusive, and safe sports betting experience for fans, not gamblers.” It has an easy-to-use interface that handles payments, keeps track of wins and losses, and has social features such as leaderboards and community posts.
“One of the toughest things as a startup trying to innovate in this space is it’s a chicken and egg problem,” Malave said, according to the cited news source. “You need a lot of money in order to access the licensing and pay for the fees and spin up the entire legal, compliance and regulatory operations you need to even be considered for one of the licenses.”
Tennessee! We're officially live and excited for you to download Wagr and start betting with your friends. Check us out and let us know who you're betting on first ☝️ https://t.co/dTi7TbllyW— Wagr (@withwagr) January 20, 2022
The newly-raised $12 million are expected to help Wagr sort out these problems, and the start-up now hopes to obtain licenses in five more states by the end of the year. Wagr had previously raised $4 million in a seed round in June last year, which was led by Seven Seven Six and Pear VC, which allowed it to pursue its Tennessee license.
Wagr is the first social betting operator to receive a license in the US. While it received approval in Tennessee last August, the company took its first bet last month during a private beta launch. But now, as of this week, it is available for iOS devices, with plans for an app for Android devices in the coming weeks.
Wagr’s motto, “Challenge your friends, not the house,” calls for users to interact with each other and invite their friends to bet against each other, instead of Wagr. Future plans include the addition of money lines, live betting, prop betting, which are expected to be launched in the coming months.