Paddy Power, the eponymous face of Ireland’s biggest bookmaker who was responsible for some of the company’s most controversial publicity stunts, is betting that his new tech startup, a virtual stock market for sports betting called ASX, will be worth at least €10m within 18 months.

Power, whose father co-founded Paddy Power – now part of Flutter Entertainment – set out last Friday to raise €500,000 for the venture on Dublin-based equity crowdfunding platform Spark Crowdfunding, at a €4.5m valuation, to accelerate growth at ASX. The venture had raised €100,000 on the platform within an hour of the campaign going live, with some investors putting money in ahead of the campaign.

While ASX already has some shareholders, Power has bankrolled the building of the business to date to the tune of a “healthy six-figure sum”. He said: “Half a million euro would be great for an early-stage startup and would give us 12 to 18 months’ work. Another couple of people are interested in investing, which would bring funds up to about €1m.

“Our big plan is to get to the stage of another fundraising round as quickly as possible. I’d say the next fundraising round would make the company worth €10m and that would be cautious, which is unlike me.”

Power is the former head of communications at Paddy Power and is still the brand ambassador, albeit on a part-time basis, enabling him to focus on developing ASX. He has backed – and advised on – as many as 13 other early-stage startups, “a couple of which paid off and a couple of which failed”.

While this is the first time Power has “been promoting anything but Paddy Power” in more than 25 years, he “100pc” intends to apply the same wacky marketing skills to ASX that he deployed at the betting giant.

He was behind a slew of novelty bets at Paddy Power, including offering odds on which supermarket chains would follow the lead of Tesco in Cardiff by banning customers from shopping in their pyjamas. The company landed in hot water with the UK’s Advertising Standards Authority over an advert that suggested a cat was being kicked across a football pitch by blind players. The same advertising watchdog also fielded a record number of complaints after the company ran an ad offering “money back if he walks” on the trial of Oscar Pistorius over his shooting dead of girlfriend Reeva Steenkamp.

“We’ll be doing on online launch for ASX and I think I’ll be able to add some of my marketing skills to it,” Power said.

ASX is billed as offering sports fans a new way to speculate on the performance of players and teams. It combines fantasy sports scoring with financial market technology to create the world’s first sports trading exchange. The platform will give users live ‘share prices’ of individual players and teams based on their expected performance, with the venture’s own AI-driven algorithm and a live data feed updating share prices.

ASX users will be able to buy or sell shares based on how they believe a player or team will perform in the short-run or long-term. Trades are then exited in a similar way to which a stock exchange operates, with ASX taking a small commission on each trade. Players can use real money, free-to-play, or play virtually.

The venture began developing its technology platform in 2019, before launching a beta version in early 2020. It has been chosen to participate in Israel’s Hype Accelerator programme, which helps sports tech startups get off the ground by nurturing partnerships with some of the biggest sports brands, clubs, leagues and broadcasters. The ultimate goal of a participating startup is securing pilots with a leading brand. ASX is in talks about with an exclusive partnership with six global brands, including the Philadelphia Phillies, the Golden Knights, DAZN and Sinclair Media.

“We have 10 opportunities to pilot our product with a third party,” Power said. “Say we have the Philadelphia Phillies, the Toronto Blue Jays, and big media companies and they select us to pilot our product with them. If we make those pilots work, you’re away, you’re growing fast and you have a proven track record and then move to a further fundraising round.”

Power dubbed the US sports betting market “the holy grail” for companies like ASX. Fantasy sports betting and speculation on player performance are now the fastest-growing areas of the American sports betting industry, with basketball the leading sport – four times more popular than the National Football League, which is in second place. As more American states legalise sports betting, revenue in that sector is predicted to grow to as much as $8bn (€6.6bn) by 2025. New Jersey, which accounts for just 2pc of the US population, generated €3.2bn in online fantasy sports gaming last year.

Power said: “The US market is immature and growing fast so the opportunities are there. It’s being described as a gold rush because of the growth and consolation, and there’s real appetite for new product. And I think (ASX) ticks a lot of the boxes.

“Another thing about the exchange is for it to be exciting and compelling for people, there has to be plenty of fluctuation in prices, so sports that have more stats, like baseball, and more things that happen in games are ideal.”

When ASX was picked for the Hype accelerator programme, “it became real and we needed to develop the game further. We needed money to make it slicker and more user friendly and to build a team and negotiate commercial partnerships”.

Power put together a management team for ASX that includes former Racing Post commercial director Mike Griffin, a former financial markets software developer with Banco Santander called Conall Flood, and even some former Paddy Power employees.

Equity crowdfunding allows hundreds of small and medium-sized investors to buy shares in early-stage companies. It operates in much the same way as Dragons’ Den, with companies pitching for investment and the “crowd” deciding whether or not to invest.

Sunday Independent