New fantasy sports app SportsHero raises $2.4M ahead of planned Australia IPO
SportsHero is a new app that lets sports fans dabble in match predictions and show their skills off against friends and other game-watchers. The app is made by the team behind Singapore-based TradeHero, a virtual trading app backed by more than $10 million from investors, and it launched officially this week.
SportsHero is available for iOS and Android and it takes many of the mechanics from inside TradeHero, the service that let stock-watchers spend virtual credits on exchanges and get tips from experts. In the same vein, SportsHero lets fans make predictions on upcoming games with virtual currency wagers, while you can also take inspiration from the more successful punters on the service.
There’s plenty of money in sports betting and, though SportsHero isn’t facilitating gambling at this point (there are links to visit gambling sites in the app), users can make money by getting others in the service to subscribe to their tips for $2 per month. The revenue from subscriptions is then split 50-50 between SportsHero and the user.
Dinesh Bhatia, CEO and founder of TradeHero and SportsHero, told TechCrunch in an interview that the top users at TradeHero have hundreds of thousands of followers and made good money from the service. He believes that the same is possible for SportsHero.
TradeHero counts over seven million registered users, Bhatia said, while SportsHero is currently at around 250,000. That’s thanks to an initial quietly distributed app, FootballHero, which has now become SportsHero. Initially the service is focused on football (or “soccer” for those in North America) but Bhatia said there are plans to introduce basketball, tennis and cricket — three sports he said are popular in the company’s target region of Asia Pacific.
Despite the links, SportsHero is its own entity with its own dedicated team. Bhatia told us he plans to devote around 90 percent of his time to the new service, with the remainder going to overseeing Tradehero, which he said is close to introducing real-time stock trading soon.
While TradeHero has raised money from private investors and VCs, including Kleiner Perkins Caufield Byers’ China fund, SportsHero has made a different move from the get go. The company announced its own fundraise on day one, with Australia-based Nevada Iron leading a $2.4 million investment in the startup. Nevada Iron has agreed to acquire the company in full via a reverse listing on the Australia stock exchange (ASX) which is pegged for August.
ASX listings are becoming increasingly popular for tech startups in Southeast Asia. Malaysia’s Catcha Group has successfully floated three companies on the exchange, while mobile social network MigMe is also present on the ASX and Singapore-based data archiving service Dropsuite is among those waiting to list this year.
“The ASX right now is very technology focused,” Bhatia told us. “A lot of investors putting money into the ASX are very keen on tech companies.”
He added also that the listing can help SportsHero grow its presence in Australia, a market of more than 20 million people that he believes to be lucrative for online services.
We asked if SportsHero’s listing signals a similar move from TradeHero in the future, but Bhatia said that, for now, the sister company is not the same move as it is primarily focused on introducing live-trading in China, where it claims most of its userbase.
The ASX has come under fire for enabling unprofitable and unproven companies in the tech space to go public, something that analysts have said devalues the exchange and its companies. In response to that, it has proposed a new series of rules to clean up listings.
Right now, any company with a market value of $10 million and $3 million in tangible assets is eligible to IPO on the ASX. The proposed regulations aim to increase that to a $20 million market cap and $5 million in assets, but any ruling is unlikely to come into effect after SportsHero’s target of an August listing.
The listing is an interesting move for SportsHero, but the fact that a new company can start up and immediately pledge to go public that same day clearly highlights the loopholes that exist. Since Nevada Iron led the investment and plans the reverse takeover, the company could pretty much chose the valuation of SportsHero to ensure that it fits within the rules. The new changes promise to tighten things up to prevent exactly this kind of listing coming to fruition.
Article Written By: Jon Russell of Tech Crunch0