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Sonja Lindenberg sat down with Soft2Bet CFO Max Portelli to dive into triple-digit growth, the probing demands of US regulators, and the company’s growing appetite for M&A.

For years, privately-owned companies have aimed to keep their business secrets closely guarded.

However, there is a growing shift towards transparency, with companies becoming more vocal about what goes on behind the scenes.

Soft2Bet is one of those seemingly omnipresent companies that are increasingly allowing us to look under their hood.

During Q1 2024, the company released its unaudited financial results for 2023, a move still uncommon among privately-held firms.

The company disclosed a 46% surge in revenue across both its B2B and B2C divisions for the year. Moreover, full-year EBITDA soared by 207% compared to 2022.

Specific figures were not disclosed, and in conversation with NEXT.io, CFO Max Portelli admits that the company “still remains a bit sensitive” about divulging certain details.

Nonetheless, pushing annual results into the public domain signals increased openness within the company.

A different playbook

Portelli – who joined the company in May 2020 – faces a fresh challenge: sustaining and amplifying the firm’s recent success.

In his view, transitioning from single to double-digit growth is one challenge, but setting sights on triple-digit expansion demands an entirely different playbook.

As he puts it: “It’s a whole new ball game, and the effort required will be substantial.”

Having previously served as CFO for Maltese-licensed payment institutions EPG Financial Services Ltd and Entercash, Portelli brings experience in dealing with iGaming clients, although his current role marks his first venture into the iGaming industry itself.

When speaking to Portelli, it becomes increasingly clear that he’s very much involved in the firm’s operations, and has transcended the stereotype of a mere number cruncher relegated to the confines of the finance corner.

Instead, he sees himself as a strategic partner, integral to shaping the trajectory of the business.

For him, it’s not merely about dissecting financial reports; it’s about crafting the broader narrative of business strategy.

“Today’s CFOs need to understand what’s happening in the business, so when it comes to providing recommendations, advice, and insights, we’re not just basing our opinions on the numbers, but also on our ability to see the bigger picture,” Portelli says.

A contentious debate

Soft2Bet has swiftly carved out a significant presence for itself, despite its relatively recent establishment in 2016.

Initially launched as a B2C operator, the company swiftly expanded its market strategy to incorporate B2B solutions.

The debate surrounding the viability of offering both B2C and B2B products in the industry is contentious.

Critics often contend that such a strategy lacks focus and can lead to conflicts of interest, as companies may find themselves competing with their own clients.

Proponents such as Soft2Bet say it is a recipe for success – their own and their clients.

“We’re not retracting from our B2C operations; rather, we’re strategically leveraging our existing assets to diversify revenue streams,” explains Portelli.

“Essentially, the intellectual property we’ve developed and successfully launched isn’t confined to our own B2C operations. It’s also offered to third parties, thus creating a sustainable, low-risk revenue stream for the group,” the CFO says.

Within industry circles, Soft2Bet has also become known for its focus on gamification.

“We were very well aware that there are many bigger and more established operators in the industry, so we needed to find a way to differentiate ourselves.“

“Gamification helps us to generate more revenue from a player by engaging them longer,” he adds.

Expect a surprise

Until now, Soft2Bet’s growth strategy has primarily been organic, with M&A playing a minimal role.

However, this is set to change.

“We’re eyeing a more active role in M&A. We’ve already sealed one deal, though there are conditions yet to be met from the vendor’s side. And there are more in the works – some nearing completion, others are just in the initial stages.

“As for the types of companies we’re eyeing, it’s a wide spectrum. Our aim is to become a one-stop-shop for companies, offering every component of the supply chain.

“While I can’t divulge specifics about our ongoing deals, I can promise that if they come to fruition, the industry will be in for a surprise,” Portelli says.

A “massive” challenge

Meanwhile, the company’s foray into the US market has seen significant progress on multiple fronts.

Soft2Bet has recently applied for a licence in New Jersey, which according to Portelli, involved a “steep learning curve.”

Most recently, the company was granted a certificate of registration in Ontario, which will enable the team to continue its expansion into one of the world’s largest regulated jurisdictions. 

The group aims to launch its operations there in early Q1 2025, although Portelli acknowledges the amount of work required.

Meanwhile, breaking into the US market poses significant challenges due to its unique regulatory landscape.

“Each state operates with its own tax system, compounded by federal regulations, while from a CFO perspective, differences in accounting standards between Europe and the US present additional hurdles,” he explains.

“It’s a massive challenge,” Portelli admits, his voice tinged with a mix of anticipation and apprehension. “Something new for me personally and for the group as a whole.”

Revealing everything

Conventional wisdom suggests that America excels in innovation while Europe takes the lead in regulation.

But recently, the US seems to have taken the lead in the latter when it comes to the amount of information US regulators demand.

Portelli recounts the litany of personal details demanded by the regulator, from marital history to the minutiae of financial holdings.

“I am neither the owner nor a shareholder in the company, just an employee. Yet, they wanted to know everything about me,” he reflects.

“Bank accounts, loans, assets – you name it, they wanted it.”

The art of negotiating

Portelli further elaborates that alongside Soft2Bet’s expanding product portfolio, a cost optimisation initiative implemented in 2023 significantly bolstered the company’s financial performance.

“As a group, we are inherently focused on the numbers. Our forecasting models provide an extensive level of detail,” Portelli explains, employing a bit of “CFO speak.”

However, modern-day CFOs contribute to the business in various ways. Portelli, for instance, has a soft spot for the art of negotiating.

“I firmly believe in this practice and consistently reassess our relationships with providers.

“Once we’ve established rapport and prove to them the potential, I expect them to consider improving our commericals.

“So far, it has been consistently fruitful. Each time we engage with a new partner, regardless of the service they provide, we’ve been able to reach a mutually beneficial agreement.”

Setting high targets

Portelli also likes to set high targets.

“Whenever we establish goals that seem within reach, we deliberately inject an extra challenge. Why? Because surpassing that additional hurdle not only benefits the company but ensures growth for everyone involved.”

“I’d like to think that this approach and mentality is what distinguishes Soft2Bet from from other operators and providers within the industry.”

With ambitious plans and growing corporate transparency, this leaves the question of what’s next for Soft2Bet.

While Portelli remains tight-lipped about any IPO plans, industry experts are surely keeping a keen eye on the company, considering it a potential contender for the public market.

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