Aussie Sports Betting Firm Cipher Sports Secures Investment
Cipher Sports Technology Group raised $5 million in a Series A investment round, allowing it to continue its expansion across the United States. Cipher Sports is based in Melbourne, Australia, and has its sights set on entering the potentially lucrative American market.
Adam Fiske co-founded Cipher Sports with Nick Slade in 2019. Fiske acts as the company’s CEO. Fiske and Slade’s company owns and operates a number of consumer-facing websites, in addition to generating revenue through advertising on websites and making referrals. Visitors to DraftKings, BetMGM, and PoinstBet will no doubt have seen their adverts. The company creates content with betting hints and tips before using affiliate links to send customers to use those tips.
Melbourne-based investment group Cygnet Capital led the investment round. However, neither Cygnet nor Cipher Sports divulged much information about the company, although it did reveal it raised $5 million from the process.
Fiske highlighted plans for a U.S. expansion, particularly his Dimers sports betting site.
“We’ve been able to build a really strong brand and a great database of sports bettors. But now that we’ve got the funding and the capital, we really can accelerate the growth of that quickly and start to compete with the current market leaders like Action Network and Covers. Our goal is to build Dimers into one of the U.S.’s most recognisable media and content brands.”
The Creation of Cipher Sports
The merger of iRival Media and Hypometer Technologies resulted in the formation of Cipher Sports. iRival specialised in content and marketing, while Hypometer focused on data and analytics. Both companies previously worked on projects together.
Cipher co-founder Slade acts as the company’s chief content officer. Hypometer co-founders Darryl Woodford and Katie Prowd are Cipher’s chief technology officer and chief operating officer respectively.
“Coming together has been quite an easy process. We’ve got a team of like-minded people with all different skill sets,” said Fiske. “It just made more sense for us to attack the (U.S.) market together rather than potentially being competitors.”
Cipher Sports has roots in Australia, mostly through an Australian Football League and National Rugby League heavy. However, 90% of the company’s focus is on the U.S. because of the size of the opportunity.
Why Focus on the United States?
There are some people wondering why Cipher Sports is determined to break into the United States market rather than focus closer to home in Australia. After all, the Australian market is massive and very lucrative.
Fiske explained how Australians have enjoyed legal sports betting since 2001. Therefore, the potential for growth is nowhere near as large in the U.S., which only legalised sports betting in 2018. In addition, Australia’s population is approximately 26.1 million compared to the 332.4 million of the U.S.
“The biggest market in the world coming online for the first time is not something that happens very often. New York has passed Las Vegas as the betting capital of the United States very quickly.”
Only 20 of the 50 U.S. states permit online sports betting but more are in the pipeline.
Jonathan Rosham, co-founder of Cygnet Capital who invested in Cipher Sports, explained his decision.
“It’s quite remarkable to think that a market the size of North America has only just embraced online sports betting, something we’ve had access to for over 20 years here in Australia.”
Rosham said it is possible for Cipher to expand its revenue into tens of millions of dollars in two to three years.
“Industry sectors that exhibit high growth and profit margins are at a premium in the current environment.”
Gaining a foothold in the United States is not an easy task because two major companies have most of the angles covered. Covers Media Group expanded in 2015 after Tribune Media bought it for US$54 million. Action Network is the other star in the sky; Better Collective paid US$240 million for it in 2021.
