Tekkorp announces AUS power-play venture backed by BetMakers and News Corp
Venture capital fund Tekkorp Capital has announced that it will launch a new sportsbook business in Australia, partnering with the Murdoch family’s News Corp Australia media subsidiary.
Expected to launch in the latter half of this year, Tekkorp’s venture will be led by Australian market figurehead Matt Tripp, Founder of Sportsbet AUS, who will be charged with establishing Australia’s next mass market sportsbook.
Seeking to dominate Australia’s online wagering market, Tekkorp’s new venture will be backed News Corp Australia that operates Australia’s highest coverage media network for news, entertainment and sports.
Both Tekkorp Capital Chairman and CEO Matt Davey and President Robin Chhabra will join the board of the new wagering entity, which the firm stated it will be ‘significantly investing’ in, as well as having provided advice on the recent transaction.
Davey remarked: “The new venture is a significant investment by Tekkorp Capital and one that I am very excited about. We’re sure this is a good bet for Tekkorp Capital.”
The two executives detailed that they intend to leverage their ‘significant experience’ of the Australian sports wagering market as well as track record of facilitating deals between media and betting organisations to successfully coordinate the new venture.
Tripp meanwhile, was drawn to the new project by the ‘strength of the team’ involved in its management as well as the opportunity posed to ‘continue his unrivalled track record’ of launching innovative products and services in the Australian market – a sector Chhabra believes holds significant potential.
Chhabra added: “The Australian online sports betting market has been booming but is ripe for innovation and competition. This consortium has the mix of skills, experience and capital to become a significant player.”
In addition, BetMakers – a technology solutions supplier and one of Tekkorp’s key investments – has been named as the exclusive platform and services provider of the consortium’s new betting venture.
The 10-year contract covers platform technology and Managed Trading Services, and also includes a revenue share agreement – BetMakers predicts that the potential revenue from the arrangement could exceed $300 million, with a minimum yield of $80 million.
Under the terms of the deal, BetMakers will receive a platform establishment fee of $2 million and a launch development fee of $500,000, with a minimum development and service fee of $7.5 million paid once the venture goes live and increasing with CPI on each anniversary of the launch.
This would represent a minimum base fee – before CPI considerations – of $75 million over the 10-year contract, whilst the revenue sharing agreement currently stands at 25% reducing by 1% on each anniversary of the launch date.
Lastly, the revenue share agreement comes with an annual cap of $20 million – increasing by 10% annually for the first eight years and 5% annually for the remaining two – equating to total 10-year revenue of $313 million.
BetMakers CEO Todd Buckingham stated: “”We are delighted to have entered into this landmark Agreement to be the B2B supplier of wagering technology to a Consortium with such high calibre investors, including a global media giant and two experts in wagering, Matt Tripp and Matt Davey.
“BetMakers is thrilled to be chosen as the new venture’s technology supplier, which is a testament to the B2B technology and business model that the Company has built.
“We believe it validates our strategy and supports our view that the end-to-end B2B solution the Company provides is an efficient and commercially viable way to successfully launch a wagering platform in today’s global wagering markets.”
Tripp will continue to serve as a strategic M&A advisor to BetMakers in addition to his current duties as CEO at BetEasy and at the new venture with Tekkorp and News Corp, but the supplier has confirmed that Matt Davey will step down from its board following the appointment of Anna Massion and Rebekah Giles as Independent Non-Executive Directors.
“I am delighted to be a part of delivering a material agreement for the Company, a company that I have been significantly involved with as a strategic advisor and shareholder,” Tripp commented.
“I have seen first-hand the technology and solutions that BetMakers has developed and implemented, with the Company continuing to set new global benchmarks in delivery for wagering operators and racing bodies around the world.
“BetMakers provides one of the best end-to-end packages of technology and trading services in the global B2B wagering market, which is why I am happy to invest in a new wagering venture that will rely upon it.”
In the aftermath of the announcement, BetMakers has seen its share price increase by 21% to trade at AUS￠78.
Source: SBC News
