Wagr launches in Tennessee after $12m seed funding round
Social betting app secures continued support from Kraft Group and Reddit co-founder Alexis Ohanian
Social sports betting startup Wagr has launched in Tennessee, becoming the first peer-to-peer (P2P) sports betting operator to go live in the Volunteer State.
Wagr targets recreational punters and aims to deviate from the traditional sports betting model by offering a more social environment for betting among friends.
It also aims to create a setting where knowledge of sports betting is not essential. Wagr takes a 5% transaction fee for every sports bet placed between friends. The app is currently only available on iOS, with plans underway to develop an Android version.
Wagr relocated its company headquarters to Tennessee’s state capital, Nashville, in December and undertook a beta launch involving 60 players.
Wagr, which is the brainchild of Harvard Business School product management graduates Mario Malave and Eliana Eskinazi, is the ninth sports betting operator to launch in the state. Wagr has ambitions to expand into five more states before the end of 2022.
Wagr initially received more than $4m in seed funding from a portfolio of US investors including Reddit co-founder Alexis Ohanian, investment firms Greycroft and Pear Ventures, as well as Tinder co-founder Justin Mateen, former Saks Incorporated CEO Brad Martin, and Joe Baker, founder of US-based whiskey brand Ole Smoky.
Ohanian is understood to be among the investors in a second $12m seed funding round, along with Kraft Group, owners of the New England Patriots and New England Revolution, and Harris Blitzer Sports & Entertainment, owners of the Philadelphia 76ers and New Jersey Devils.
A number of VC businesses are also understood to have pledged investment funding.
In a statement confirming the latest seed funding, Wagr’s owners said the capital would be used to “accelerate” product development as well as covering licensing and launch costs in multiple markets.
Wagr has also said funding will be used to expand its operational team, which quadrupled during 2021.
In comments reported by Forbes, Wagr co-founder and CEO Mario Malave said: “One of the toughest things as a start-up trying to innovate in this space is it’s a chicken and egg problem.
“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,” he added.
Discussing the firm’s operational model, Malave continued: “[Traditional operators] only make money if you lose more than you win, full stop, so the incentive alignment is misaligned.
“You’re only a profitable customer to them if you have a negative return on your personal bets.
“Our entire value proposition is, ‘We’re not the house’. Our motto is, ‘Challenge your friends, not the house’,” he added.