Analysis of Micro-betting Startup Betr Founded by Joey Levy and Jake Paul

Betr is a new startup company focused on micro-betting. There are plenty of apps out there that let one bet on sports, but Betr is taking it to a whole new level. Imagine there's a baseball game and one wants to bet on it. They can easily bet on the outcome of the game through various apps, but Betr allows one to gamble on every play of the game. Let's say one thinks that the pitcher is going to throw a strike next. With Betr, one can bet their own money on that prediction. 

Betr caught my attention after it raised $50 million from strategic investors and institutional investors. Their investors include Florida Founders, 8vc, Aliya Capital Partners, Fuel Venture Capital and many others. They also received funding from Travis Scott and Ezekiel Elliot. I couldn't find what valuation they raised the money at, but I would predict that they sold around 10%-25% of the company during their funding raise which if I am right, they raised money at a $200,000,000-$500,000,000 valuation. They'll likely be raising money again, so I don't imagine them parting with more equity than that for a series A round of funding. 

That's a very impressive round of funding for a brand new company. I imagine that Betr is a good bet on an acquisition play as it is reasonable to believe that a larger sports-betting company could acquire them. For investors to make money off of this investment, one of three things must happen. Either Betr gets bought by a bigger company, Betr becomes publicly traded, or Betr remains private and investors get their money back through dividends. I believe that there is a good chance of the first two happening and no chance at the third. While I do believe Betr could be a good acquisition play, I also could imagine them going public at a much later date which would give their investors liquidity. 

The company is also launching a media play through Jake Paul who just created his own sports show through Betr. I could imagine them doing quite a bit with media to boost revenue for the company. I believe they will make revenue from this if they can find sponsors to advertise for during their shows. YouTube ads alone will not be a huge revenue source.

I think this is an interesting idea, but I also see some possible problems. Sports-betting is not legal in 16 states according to Insider.com. That means that Betr can not produce any revenue in those states except through its media side. Also, micro-betting is a very new idea and it is not yet known how much money is actually there for this. 

If I have the opportunity to invest in Betr, I could see myself doing so depending on the valuation at that time. It's an interesting idea, but I also believe it's a very risky investment. 

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