The funding initiative was spearheaded by Lux Capital, a New York-based venture capital firm.
Notably, the funding pool attracted participation from around 30 investors, including computer scientist Paul Graham, investor and Hall of Fame NFL quarterback Joe Montana, and Dropbox co-founder Arash Ferdowsi.
The list also includes prominent VC fund Y Combinator, Soma Capital, Innospark Ventures, Rebel Fund, Bayhouse Capital, Archon Capital, Palm Drive Capital, TRAC, True Culture Fund, CapitalX, and numerous others.
Novig is a peer-to-peer exchange that offers users the ability to place bets directly against their friends or the market, distinguishing itself from traditional set-ups where bets are placed against the house.
Rather than charging retail users, Novig generates revenue from three main sources: institutional traders, data monetisation and internal market making.
Novig CEO Jacob Fortinsky (pictured left) and CTO Kelechi Ukah, are recent Harvard graduates with previous experience at Jane Street and Bank of America, as well as in machine learning and politics.
“We’re honoured to have the support of so many of the world’s leading tech investors, who believe in our mission to democratise sports betting for good,” Fortinsky stated.“Our vision is clear: to reshape the sports betting landscape that has long favoured exploitation over innovation, and to usher in an era of integrity, transparency and empowerment.
“Together, we’re rewriting the rules and putting the power back in the hands of bettors,” he added.
He added that each year $300bn is wagered on sports in the US. “All of which is bet against retail sportsbooks, which have egregious 7-10% margins, discriminatory and inefficient practices, and a stale betting experience. No matter how good of a sports bettor you are, the house always wins,” he said.
In preparation of its launch, Novig conducted a beta test involving 200 users who engaged in a two-week pre-launch trading tournament.
This effort resulted in 15,500 orders across 1,290 markets.
Novig’s platform offers instantaneous confirmation of live bets, and the firm claims that its matching engine is 100 times faster than those employed by industry frontrunners.
“We’ve been overwhelmed by the positive reception of our product from Novig’s first users and are excited to bring our product to regulated markets beginning this fall in Colorado,” said Fortinsky.
Last year, Novig secured a spot in the accelerator portfolio of Silicon Valley’s Y Combinator.
The accelerator invests $500,000 per company biannually in multiple start-ups.
The start-ups then relocate to Silicon Valley for a three-month period, during which mentors collaborate closely with each enterprise to refine their processes and enhance their investor pitches.