Novig Betting Exchange’s $6.4 Million Funding Secured Ahead of Colorado Debut

Article ByDavid Weir

August 24, 2023

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Posted in: US Sports Betting News, US Gambling News

Novig, an ambitious U.S. targeting betting exchange, has successfully raised $6.4 million in seed funding, shortly before its first U.S. launch in the state of Colorado.

Betting exchanges are peer-to-peer sports betting platforms which cut out the bookmaker by having bettors set odds and wager with each other. Despite being a popular form of wagering in Europe since the early 2000s, with operators like Betfair (now part of Flutter), the model has previously failed to take off in the U.S.

Novig’s founders are two recent Harvard graduates, CEO Jacob Fortinsky and CTO Kelechi Ukah. They say the exchange will bring freedom, transparency, and increased efficiency to U.S sports betting markets when it launches in Colorado in October.

Novig’s recent funding round saw participation from a range of investors and groups. That included Hall-of-Fame quarterback turned financier Joe Montana.

“We’ve been overwhelmed by the positive reception of our product from Novig’s first users and are excited to bring our product to regulated markets beginning this fall in Colorado,” said Fortinsky in a press release.

Related: The best U.S. online betting sites, rated and reviewed

Understanding Betting Exchanges

Unlike traditional sportsbooks where bettors place wagers against the house, betting exchanges operate on a peer-to-peer model.

Here, bettors set their own odds and bet against each other. The exchange simply acts as a middleman, matching bets between users.

This model offers more flexibility for bettors, often leading to better odds compared to traditional sportsbooks.

It also offers deeper strategic betting, as bettors can both back (betting that an event will happen) and lay (betting that an event won’t happen) outcomes.

Most betting exchanges operate on a commission model, wherein they take a certain percentage of each wager placed. However, Novig does not charge players at all.

Instead it says it’s going to make money via “institutional traders, data monetization, and internal market making.”

Rewriting the Rules?

Novig claims its platform will revolutionize the sports betting landscape by offering a transparent and fair environment for bettors. The operator emphasizes its commitment to reducing the traditional margins that sportsbooks maintain, aiming to provide better odds and more value to its users.

Novig believes its unique selling proposition lies in the betting exchange model, refined with super-fast real time bet updates and the added selling point of no fees.

The operator claims that its platform will offer more competitive odds than traditional sportsbooks, potentially drawing in seasoned bettors looking for better value.

It says the peer-to-peer model also fosters a sense of community among bettors, allowing them to match wagers against fellow enthusiasts rather than a faceless corporation.

“Our vision is clear: to reshape the sports betting landscape that has long favored exploitation over innovation, and to usher in an era of integrity, transparency, and empowerment,” Fortinsky said.

“Together, we’re rewriting the rules and putting the power back in the hands of bettors.”

Believing in the Mission

Those are big claims. But, in recent years, many high-profile betting companies promising innovation have talked big, but failed to deliver. For example, Betr, the Jake Paul-backed microbetting app, talked of a market revolution when it launched earlier this year. However, it has struggled to compete even in the lower pack of the few markets it has opened in since then.

In Novig’s favor, betting exchanges are a proven model, that are almost guaranteed to be of interest to U.S. bettors.

However, they are more complicated and involved than a simple sports book in many ways. At a time when market-leading operators like FanDuel are building social media-style feeds and storyline narrative bets to streamline the app experience, will enough U.S. bettors want a more complicated option?

Then there’s the competition. Many smaller operations have struggled to compete nationally against the dominance of FanDuel and DraftKings, and with Novig’s business model specifically taking sights at the current corporate model, the two founders are going to be up against it.

It may also be worth noting that FanDuel is owned by Flutter Entertainment, which also operates the world’s biggest betting exchange, Betfair. The Irish conglomerate has shown no interest in putting its considerable financial muscle behind a betting exchange in the U.S., despite Betfair offering New Jersey online casino services since 2016.

However, clearly some investors believe in the potential of Novig as a pioneering American betting exchange, and the leadership of Fortinsky and Ukah to deliver it.

“We’re honored to have the support of so many of the world’s leading tech investors, who believe in our mission to democratize sports betting for good,” Fortinsky said.