Monday, October 5, 2015
Three Hills Capital Partners invests in Genius Sports GroupInvestment Activity
Three Hills Capital Partners (“THCP”) is pleased to announce the closing of a £10 million investment in Genius Sports Group, 100% owner of subsidiary Betgenius, one of the UK’s largest providers of sophisticated data-driven software solutions to global sports betting and lottery companies.
The investment will be made via a combination of debt and equity: £10 million in debt as sole lender of the company and a minority equity position of c. 5%. The capital provided will support Genius Sports Group in financing strategic acquisitions in the scouting and sports data collection areas, with the potential to put additional capital at work in the medium term.
Genius Sports Group was established concurrently with THCP’s investment in order to become the holding company of the different operating assets resulting from the M&A strategy pursued by the management team.
Its main asset at closing is Betgenius, a company founded in 2000 and with headquarters in London, where it employs c. 110 employees focused primarily on the development of software solutions, sales, marketing and the management of the Group. Genius Sports Group also has offices in Australia, Bulgaria, Denmark, Estonia, and Lithuania. The business primarily collects and processes odds, fixtures and results data covering a wide range of betting markets. It has grown to become one of the leading B2B SaaS (Software as a Service) suppliers that allow bookmakers and lottery operators to either partially or completely automate or outsource their sportsbook management operations, with a view of improving the profitability of the operator’s sportsbook.
Betgenius’ products and services are primarily divided into two categories: (i) Sportsbook Management, a suite of highly customisable tools that allow bookmakers to automate almost every aspect of their pre-match and live-match betting whilst leaving them in full control; and (ii) Customer Marketing, aimed at driving customer retention, acquisition and engagement for betting operators by optimising online advertising campaigns, retargeting customers, and identifying and managing profitable / unprofitable customers. Within the Sportsbook management category, the business also recently launched a new Sports Integrity product, providing sports governing bodies with key data and information to help them monitor betting markets and identify anomalous and suspicious patterns and other integrity issues.
The company made revenues of £15.0 million and EBITDA of £5.1 million in FY 2014.
Mark Locke, CEO of Genius Sports Group, commented: “We are delighted to have secured an investment from Three Hills Capital Partners. They took the time to really understand our ambitions and culture, and created a bespoke, flexible model that suited the business. The investment will help take Genius Sports Group to the next level, particularly with our plans to grow further internationally, maximise returns from our underlying business, further diversify the products we offer, and extend the business verticals we operate in.“
On the future plans of the company, he added: “We have an aggressive growth strategy for the next five years, which will see our business gain a stronger presence in a number of new territories and markets, including North and South America. We also have our sights firmly set on acquisition opportunities in addition to adding new products and clients to the portfolio. The future continues to look positive for the Group and we have aligned our objectives to match expected developments in both the sports and betting industry sectors. The investment from Three Hills Capital Partners allows us to meet our goals much faster than would otherwise have been possible.“
Leks de Boer, Partner of Three Hills Capital Partners since inception, commented: “Our partnership with Genius Sports Group is a true testimony to the ’Three Hills Capital Partners partnership principle’: a long-term mutual understanding and will to collaborate in a flexible and dynamic atmosphere. The management team is the perfect fit to the circle of entrepreneurs we want to support, a skilled, driven and proactive team strategically looking to take advantage of the market situation.”
Mauro Moretti, founder and Managing Partner of Three Hills Capital Partners, commented: “The investment in Genius Sports Group marks another step in THCP’s development into the UK market. Backing a leading player, in the hands of an experienced and driven management team and operating in a high-growth market, represents a unique opportunity for us. The sector’s increasing regulation will with no doubt leave as winners the most internationally established and best technically prepared players such as Genius Sports Group, and create consolidation potential in the near future.”