Paddy Power-backed ASX smashes second-round funding target
Start-up exceeds investment target in less than 24 hours as Paddy Power invests a further €50k of his own cash
Paddy Power-backed sports trading exchange start-up ASX has secured more than €500,000 (£430,432) in a new investment funding round following high demand from investors.
A second funding issue began on 23 May and has secured €536,812 (£462,113) in investment in less than 24 hours from a total of 140 investors, representing 107% of its target, despite the campaign being scheduled to run for another 33 days.
In this second round, shares were not offered at a fixed price, with investments being converted into shares at a 25% discount to the price per share when the sports trading firm conducts its next fundraising exercise in 12-18 months.
For example, if the ASX price per share at the next fundraising was €4, investors from this round will have their shares in the business converted at a price of €3.
Company founder and president Paddy Power has also invested a further €50k (£43,000) of his own cash in this second funding round.
The firm said that while it required no immediate additional funding, it chose to begin the second funding round due to the oversubscribed demand levels of the first funding round.
In the first round, a total of €632,485 was raised from a total of 188 investors, representing 126% of its initial target based on a business value of €4.5m and a 10% equity stake.
Funding from the first round is set to be used for “post commercial pilots” aimed at entering the US sports betting market at scale, with the firm already in discussions with several potential partners.
The destination of funding for the second round has not been disclosed.
ASX operates as a virtual stock market for US-focused sports teams and players where users generate income by speculating on the real-life performance of these athletes and their respective franchises.
ASX then takes a small commission on trades placed on the platform, like Betfair or Football Index, for example.
Trading will be offered via the technology platform under the ASX brand and to other brands on a white-label agreement under a rev share model.
However, instead of competing with sports betting operators, ASX will position itself as an independent platform available for integration into existing DFS providers and sportsbooks.
The scoring system is identical to the one utilised by existing US-based fantasy providers such as FanDuel, which is majority-owned by Paddy Power’s parent company, Flutter Entertainment.