A fast-growing sports prediction market company is poised to make huge technology and product advances following a major investment.
Key Takeaways
- Sweepstakes sports prediction platform picked up $18 million in funding.
- Novig plans to use the cash to upgrade current products, add more, and increase payment platforms.
- The app’s users play traditional sportsbook markets against each other, not the house.
Novig, a sweepstakes app that launched in September 2024, announced on Monday that venture capital firm Forerunner led an $18 million Series A funding round. Y Combinator, NFX, Perceptive Ventures, and Gaingels also invested in the prediction market platform that offers commission-free, peer-to-peer sports trading.
"The support from some of the world's leading tech investors, who believe in our mission to democratize sports betting for good, is a powerful endorsement – not just of what we've built, but of the future we're creating,” Novig CEO and co-founder Jacob Fortinsky said. “This funding will allow us to scale our mission across more sports, more formats, and ultimately, to more users."
With the new funding, Novig plans to expand into new sports markets and enhance its existing ones, while developing new features like leaderboards, group contests, and head-to-head trading. Novig said it wants to add debit and credit card payments to the app, launch a full web platform, and grow its engineering and product teams with the influx of cash.
Attractive growth
Novig’s growth is one of the main attractions for investors. The company has achieved a 50x increase in monthly trading volume since last fall and has surpassed 2 billion annualized volume in Novig Cash.
The prediction market company said that more than 90% of its trades are peer-to-peer, which it says helps customer retention.
"Novig sits at the center of several key secular trends in gaming and entertainment, namely that consumers increasingly are spending their time, energy, and attention with financial products," Fawzi Itani, Principal at Forerunner, said. "The Novig team brings the most sophisticated and nuanced perspective to sports prediction markets. They not only deeply understand their target customer, but are building a system that is more fair, community-oriented, rewarding, and well, fun."
Peer-to-peer markets
Novig’s platform, like many sweepstakes gaming operators, offers users free coins at sign-up. Customers can also purchase Novig Cash, which can be redeemed for cash and prizes.
The sports prediction app, founded by Fortinsky and Kelechi Ukah, operates in 41 U.S. states and offers many traditional-sportsbook markets on MLB, NFL, WNBA, tennis, PGA Tour, UFC, and more. Users can bet the odds listed or set their own, all while playing against each other, not the house.
“What we're building isn't just sports predictions – it's a true peer-to-peer market,” Fortinsky said. “We believe users deserve a system that rewards skill, reflects true supply and demand, and gives every fan a fair shot. We've quickly become the No. 1 sports prediction market in the U.S., and our organic growth speaks to the strength of our product and the passion of our community.”
Scrutinized gaming
Novig’s expansion comes at a time when both sweepstakes operators and prediction platforms have faced legal issues in the U.S. Novig operates under the sweepstakes model, which has run into regulatory problems, especially in states with legalized sports betting and/or iGaming.
Connecticut, Montana, and Nevada have banned sweepstakes companies from operating. New York legislators passed a prohibition bill earlier this year, and California, which doesn’t have any form of legalized online gambling, had a sweepstakes-ban bill introduced this summer.
Meanwhile, prediction market companies like Kalshi are battling multiple cease-and-desist orders. The platform, which offers sports-related contracts and is regulated by the Commodity Futures Trading Commission, suffered a setback earlier this month when a Maryland judge ruled against Kalshi.
