Stakes raises $5.3 million for its friendly sports betting platform where users can win NFTs

Since mobile sports betting was introduced in New York the last weekend of January, over $6 billion has been wagered. Although this has been an outlet for avid sports bettors, there are still a large number of sports fans who are looking for social ways to share their love of sports without betting money on the outcome. Challenges is a sports betting platform that allows sports fans to place friendly bets and win NFTs. All results are recorded on the blockchain, giving users bragging rights and an unchanging track record with the NFT serving as a hedonic performance-based benefit or what the company calls “proof of flexibility.” There is absolutely no monetary exchange on the platform, instead Stakes chooses to focus on the community aspects of sports fandom. The Stakes app is currently in open beta and the company recently graduated from IAC’s incubator program.

Alley Watch met the founder and CEO of Stakes Kevin Wang to learn more about the company, the company’s strategic plans, the recent round of funding and much more…

Who were your investors and how much did you raise?

We raised a seed round of $5.3 million from Digital Currency Group, FBG Capital, LD Capital, Cadenza Ventures, Matrixport Ventures, CMS Holdings, Sterling Select Group, and The founders first.

Tell us about the product or service offered by Stakes.

Stakes is a social sports platform where users can place free and friendly bets against and win NFTs as digital bragging rights. We want to create your sports fan chart on the blockchain so you can prove your knowledge.

What inspired the launch of Stakes?

The idea for Stakes was conceived in late 2018 when I was reviewing the Supreme Court’s repeal of PASPA, which effectively paved the way for state-licensed sports betting in the United States. I started telling friends about how exciting this development was, but the responses I received surprised me. Most of my friends, despite being big sports fans, didn’t seem interested in traditional sports betting whether it was legal or not. They didn’t want to gamble their money and many of them didn’t even understand the technical jargon of money lines, parlays or teasers used in traditional sports betting parlance. They were never going to become inveterate sports bettors. However, somewhat counterintuitively, almost all of them were active in fantasy leagues with friends, or regularly participated in office pools for March Madness or Super Bowl Squares. Even when these involved cash buy-ins, it seemed like cash was incidental. It’s all about social camaraderie, small talk, bragging rights. Almost all of them were also in group chat to make sports predictions, casual friendly bets and brag about each other when their sports predictions came true. This is supported by a report published by Twitter in 2019 (see attachment) which explained why Twitter users participate in fantasy sports, with the two main reasons being a sense of community and proof of knowledge. In last place? Make money. So even when fantasy leagues are played for money, that’s the least important reason they’re played.

It confirmed what I had known since I was a young child, that sport is inherently a community experience. Sports fans are some of the most passionate communities we have in society. Musical tastes can change, a band you liked in high school may not interest you when you get older. It is common for a sports fan to be a fan of their favorite sport or team for life, in many cases it is even passed down from generation to generation as a family heirloom. This was certainly the case for me growing up with my stoic Taiwanese immigrant father. He rarely showed affection, but when it came to sports, it was like a flipped switch. I could see the full range of his emotions after every Knicks heartbreak and every Michael Chang win. Sport is how we bonded.

For Stakes, I wanted to create a new kind of betting platform that didn’t rely on traditional real-money betting, but something that focused on bragging rights and the friendly aspects of being a fan. sport. Something that would appeal to all sports fans. Imagine unbundling sports shots from Twitter and turning it into a competitive game.

How is Stakes different?

Stakes does not compete with any traditional bookmaker making real money regulated bets. There are already plenty of options for people to bet with cash or crypto, legal or otherwise. We want to attract sports fans who will never become hardcore or even casual bettors, as the very nature of sports betting alienates a large proportion of sports fans. Stakes is a Web3 social betting platform used to build a public reputation as a sports fan, with NFTs that represent your status. Anyone can create their predictions and others can bet with virtual video game currency to agree or disagree with you. Wagers are always free to play and are not considered gambling. We differentiate ourselves from real world sports betting, prediction markets, fantasy sports, free prediction games and social media platforms. We have elements of each, but we believe we are creating a new category of sports betting platform that is web3 native.

Which Stakes target market and how big is it?

Stakes targets the approximately 200 million sports fans in the United States

What is your business model?

We monetize the sales and secondary transactions of our NFTs.

What are your post-COVID office plans??

Still TBD as we scale the team.

How was the funding process?

It was intense but our cycle went pretty quickly. I was lucky enough to be in the crypto industry for a long time and was able to tap into my network of investors.

What are the biggest challenges you have faced when raising funds?

Obviously a big fundraising challenge is dealing with a lot of people dropping by because they didn’t quite understand the value of the prop or we were too early for them. We were lucky to be oversubscribed, so a big challenge was how to allocate the allocations.

Obviously a big fundraising challenge is dealing with a lot of people dropping by because they didn’t quite understand the value of the prop or we were too early for them. We were lucky to be oversubscribed, so a big challenge was how to allocate the allocations.

What factors about your business made your investors sign the check?

I’m guessing mainly the team we have, my background, the endorsement of some of our early investors that I worked with before and knew well. And finally the product and signals we have so far.

What milestones do you expect to achieve over the next six months?

We are focused on hiring key technical roles, building our roadmap, running experiments, and finding product/market fit.

What advice can you give to New York businesses that don’t have a fresh injection of capital into the bank?

It’s cliché, but building strong relationships always helps, maybe not for this round, but you never know later when you can help them or they can help you.

Where do you see the business going now in the short term?

Hopefully we will be able to execute and meet our key performance indicators and achieve product/market fit.

What’s your favorite outdoor restaurant in New York?

Little Frankies in the East Village.

You’re seconds away from joining Tech’s hottest list!
register today

Comments are closed.