Cipher Sports Technology Group has raised $5 million in a Series A investment round. This Australian sports betting operator is ready to expand internationally, and it expects the money to help it fulfill its goals.
The investment will serve as a foundation for an initial expansion in the US market. Despite several false starts recently in a number of states, Cipher already has a presence there. As more states come online, it will be ready. It also plans on expanding to other countries within the next 12-18 months.
Leading the investment round was Cygnet Capital, an Australian investment firm based in Melbourne, according to a company press release. It also gained support from a number of “high net worth” individuals. Cipher didn’t disclose post-money values, revenues, or any other financial information.
Cipher operates sports betting sites such as dimers.com. It features proprietary technology that the company says aids bettors in better predicting the outcome of games. In addition, advertising on the websites and referrals to online betting sites, such as DraftKings, BetMGM, and PointsBet, make money for the company.
US Gaming Market Still a Target
Cipher also makes revenue through its B2B channel. This includes selling products and services for media companies and sportsbooks. The company, for example, closed a deal in May with Advance Local, a US publisher. Through the deal, Cipher’s content, tools, and videos became part of PennLive.com, LehighValleyLive.com, and GulfLive.com websites. All of the platforms belong to Advance.
Cipher’s chief executive Adam Fiske said that Cipher has built a “really strong brand and a great database of sports bettors.” He added that the new funding will allow the company to accelerate its growth and compete with current market leaders.
Cipher is a relative newcomer in the sports betting industry, a product of a merger between Australian sports betting companies iRival Media and Hypometer Technologies. The latter, founded in 2015, targeted data and analytics, while iRival was a content and marketing company.
Nick Slade, who cofounded Cipher with Fiske in 2019, is Cipher’s chief content officer. Meanwhile, Cipher’s chief operating officer and chief technology officer are, respectively, Darryl Woodford and Katie Prowd, cofounders of Hypometer.
As a result of their long-standing working relationships, finding common ground for the new sportsbook was “an easy process,” according to Fiske. He stated that it was more practical to work together than to be potential competitors in the US market.
Australian Growth Restricted
Cipher is an established company in Australia, with a prominent position in the Australian Football League and the National Rugby League. However, the US market is where the future is, according to Fiske. He stated that the US is the focus of 90% of the company’s business because it offers so many opportunities.
Australia has had legal sports betting since 2001– the US only since 2018. As a result, the potential for growth in Australia is less than in the US. Almost half of the states, as well as Washington, DC, already have legal sports betting.
Other states, such as Kansas, Maryland, and Ohio, are finalizing the rules for their markets. Additionally, California, North Carolina, and several more may find a path to legalization next year.
Fiske admitted to Forbes that Cipher and other startups have had difficulty raising capital. This is due, in part, to hesitation on the part of venture capital firms, investors, and others. They anticipate an economic slowdown that could impact online sports betting, online gambling, and other non-essential spending. However, Fiske doesn’t see Cipher needing to raise more money any time soon.
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