Exclusive: Coolbet founder’s latest iGaming start-up prepares for launch after smashing funding target
He has now founded Sisu Group, which is pledging to build the “next generation” iGaming platform for both casino and sportsbook solutions. It will also manage a multi-brand B2C online gambling operation.
Joining Svendsen at the start-up are co-founders Anders Karlsen, who will serve as CEO, and Yannick Svendsen, recruited as CFO.
Both bring extensive experience from their tenures at Coolbet, which culminated in the sports betting business being sold to GAN for €150m back in 2021.
Sisu Group is headquartered in Tallinn, Estonia, and started developing its platform software in May 2022.
It already employs more than 50 staff, with more than 300 years of combined industry experience.
Get in at ground level
Each member of staff had the opportunity to contribute to the company’s initial funding, which resulted in 29 individuals committing €6.9m to the cause.
“A large part of building a successful company comes from having motivated employees,” said CEO Karlsen of the initiative.
“We did something rather unique at Sisu: everyone had the opportunity to contribute to the starting capital at founder terms.
“We now have a group of key individuals who are owners, believe in our mission, and the drive needed to succeed in a highly competitive landscape,” he added.
Sisu Group believes innovation and scalability in the iGaming industry are currently being stifled by “outdated” solutions and a dependency on third parties.
Point of difference
The start-up was formed to address that challenge. It believes it can stand out as a credible solution in the market because there are a limited number of competitors out there, largely due to the complexity of the product.
“Having ownership of our technical solution is a key pillar in our strategy,” said Karlsen. “It gives us control of what we want to develop and deliver to the end user.“It’s all about giving an exceptional user experience through automation and personalisation. Owning your tech solutions gives you that opportunity,” he added.
The firm’s proprietary tech stack will be agnostic to B2C and B2B, for both sportsbook and casino. It is 100% cloud based, and will offer full cryptocurrency capabilities.
“Our mission is clear, to build the best and most scalable iGaming solution in the market,” said Karlsen.
Capital raise was oversubscribed
CFO Svendsen concedes it will be a “huge undertaking” to build a platform from scratch.
It therefore sought to raise €10m in capital, but raised the amount to €14m after strategic investor Level Up Entertainment committed to a €9m stake.
Eventually, the company was granted subscriptions of €19.5m, meaning the capital raise was oversubscribed by some €5.5m.
“We now have a good capital buffer, and can solely focus on building the company,” says Svendsen. “At this stage, we couldn’t have been better positioned for success.”
Level Up Entertainment is an investment company co-founded by Hans Martin Nakkim, who has industry experience as the previous CEO of Cherry AB and MD of ComeOn.
“As a long-time competitor, I have been impressed by Jan’s previous projects,” said Nakkim. “When we heard that he was starting the development of a new sportsbook, we reached out to explore the possibility of using this for some of our brands.
“During a visit to Tallinn where we met several of the team members, we were so impressed that we quickly wanted to explore the possibility of making a larger investment in Sisu Group.
“The investment in Sisu Group, and the opportunity to later invest in a joint venture, makes this our largest investment by far,” he added.
Sisu Group intends to go live with the first brand on its casino platform in December 2023.
It then hopes to launch a flagship sportsbook brand ahead of next summer’s Euro 2024 tournament, before onboarding its first B2B sportsbook client in 2025.
“This will be a big opportunity for us to showcase a scalable platform and a sportsbook that can operate both B2C and B2B seamlessly,” said Karlsen.
“In the long run, we believe we can operate an efficient and profitable organisation with a 30% to 40% smaller headcount than comparable operators,” he added.