Sharp Alpha Advisors Closes $10M Venture Fund, Seeds 11 Sports Betting Startups

Posted on: October 12, 2021, 12:25h. 

Last updated on: October 12, 2021, 02:49h.

Sharp Alpha Advisors said its first investment vehicle — Sharp Alpha Fund I — raised $10 million and was oversubscribed, indicating robust demand. Sharp Alpha Advisors is a venture capital firm focusing on iGaming and sports wagering investments.

Sharp Alpha
Sharp Alpha managing partner Lloyd Danzig, seen above. His firm’s first venture fund closed a $10 million capital raise. (Image: Business Insider)

New York-based Sharp Alpha is allocating more than half of the $10 million raised to 11 startups, and the remainder will be devoted to initial stakes and follow-up investments in portfolio companies displaying favorable growth trends.

The fund targets initial allocations averaging $250,000 in Seed and Series A financings, with plans to provide follow-on support in subsequent rounds,” according to a statement issued by the venture capital firm.

“Sharp Alpha also maintains a co-investment vehicle that enables limited partners to invest additional capital in select deals alongside the fund. Through the use of this vehicle, the firm has made initial allocations in excess of $1 million,” the statement continued.

Early-stage companies Sharp Alpha has already seeded include Players’ Lounge, GridRival, PickUp, and Prophet.

Right Time for Sharp Alpha Capital Raise

Investors are clamoring for the next big things in the iGaming and sports betting realms. That’s following last year’s crop of internet casino and sports wagering initial public offerings (IPOs), including ballyhooed names such as DraftKings (NASDAQ:DKNG) and Rush Street Interactive (NYSE:RSI),

Sharp Alpha may have some of the answers to that query, as its roster of portfolio companies reaches beyond traditional internet casinos and sportsbooks into fresh concepts in the online gaming space. For example, the aforementioned Prophet operates peer-to-peer sports betting exchange, while Players’ Lounge lets users play their favorite video games for cash. Snapodds, another Sharp Alpha portfolio firm, lets bettors shop for the best live odds on games by pointing their smartphones at their televisions.

What’s clear is that Sharp Alpha Fund I raised capital at a time when Wall Street is forecasting epic growth for iGaming and regulated sports betting.

“We expect a combination of favorable legislation and consumer adoption to drive growth in US online sports betting and internet gambling (i-Gaming) from $900 million/$1.5 billion markets today to $39 billion/$14 billion in 2033, equating to 40 percent/27 percent CAGRs for over a decade,” said Goldman in a note to clients earlier this year.

Sharp Alpha Tech Focus Is Notable

As Lloyd Danzig, Sharp Alpha managing partner, notes, the industry is ripe for consolidation and that could include startups that aren’t yet publicly traded.

Not only is the sports betting industry at an inflection point, but market leaders are choosing to buy rather than build at every turn. With M&A serving as the primary mechanism through which operators achieve differentiation and vertical integration, it is a great time to underwrite next-gen infrastructure,” he said in the statement.

As just one example, Sharp Alpha’s investments in early-stage tech companies could prove prescient, because recent mergers and acquisitions chatter suggests suitors on the prowl for additions to their tech stacks.