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- Novig secures $75 million in Series B funding, valuing the company at $500 million.
- The platform offers commission-free sports betting to retail users, challenging traditional sportsbooks and major prediction markets.
- Novig plans to operate under the Commodity Futures Trading Commission to expand nationally.
A new player is shaking up the U.S. sports betting scene. Novig, a sports-focused prediction market, announced $75 million in fresh funding. The round was led by blockchain venture firm Pantera Capital. This funding values the company at $500 million.
Novig aims to compete with established prediction markets like Kalshi and Polymarket. These platforms gained attention after recent court rulings expanded the legal scope of prediction markets in the U.S. Now, sports contracts dominate their volume.
Novig takes a different approach, focusing on fairness and consumer experience rather than legal positioning. The company was founded by Jacob Fortinsky and Kelechi Ukah. They began work on Novig in 2021 while at Harvard.
Novig Navigates an Uncertain Regulatory Environment
They have entered a tech incubator called Y Combinator in 2022. The regulatory environment had initially been uncertain. For instance, Polymarket had been banned from operating in the US in 2022 due to unlicensed betting activities. Novig had used various strategies, such as registering to be a sports betting operator in Colorado and then a sweepstakes model.
The current regulatory environment has Novig applying to be approved by the Commodity Futures Trading Commission to operate across the US. This process is expected to be completed in six months.
Novig operates a peer-to-peer model. This means that users on Novig trade among themselves rather than against the house. This model provides users with a higher chance to win because the odds are in their favor. Unlike Kalshi or other major markets, Novig does not charge a commission to retail users.
Instead, there are fees charged to institutional users. This model allows users to bet against “smart money,” and 20% of users are expected to be profitable. This is a higher number compared to what is experienced on other platforms.
CFTC Recognizes Legitimacy of Event-Contract Markets
The company’s focus, the company itself emphasizes, is sports, not other events such as political results or crypto markets. In creating a sports-focused platform, Novig hopes to attract sports enthusiasts who prefer to engage in activities that bring them enjoyment rather than complex financial agreements.
The company also hopes to provide a solution to the problem that sportsbooks have, namely that they are more focused on making money than on the user’s experience. Sportsbooks, the company presents, are part of the sports fan’s experience. The model that the sportsbook will follow will bring more enjoyment to the sports fan without the hefty fees that sportsbooks impose.
Fortinsky describes the service as a new form of trading system, not gambling. The issue of prediction markets and their effect on sports fans has been a topic of concern for regulators and critics, whether it can be considered another form of gambling. However, the CFTC recognizes the legitimacy of event-contract markets and their role in the economy.
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