Scout details ‘essential’ investment for US plans
Scout Gaming Group has said that an additional SEK42m (€4m/$4.6m) in capital from institutional investors will be “essential” to the company’s plans to expand its services into the US market.
The technology firm specialises as a B2B supplier of fantasy sports and has been seeking to take advantage of increasing opportunities for growth in the US.
As part of this strategy, to gather funding, Scout opted to issue 900,000 new shares to institutional investors at a subscription price of SEK47 per share.
Swedbank Robur, as well as existing shareholders in the form of Novobis AB, Knutsson Holding AB, Isoquant Holding AB, Naxs AB and Lars Wingefors AB subscribed for shares in the rights issue, allowing the firm to raise around SEK42m before issue costs.
Speaking to iGamingBusiness.com about the move, Billy Degerfeldt (pictured), CFO and investor relations at Scout, said the firm will mainly use the funds to finance growth plans in the US, but also for exploring general expansion options.
“[The investment] is essential for entering the US market,” he said. “We are experiencing a rapidly increased demand. It is basically because we are the leading global B2B supplier of fantasy sports.
“So what happened is that people looked upon DraftKings and realised that the reason for their success was to build a database by using the legal option, fantasy sports, before NJ was regulated.
“We are also experiencing interest among operators close to launching sports betting, realising that DFS is a natural part of the US betting market.”
The investment move comes after Scout earlier this month also signed a new partnership with Metric Gaming as part of a joint growth effort in the US.
The non-exclusive agreement states Metric and Scout will have reciprocal access to each other’s products and jointly develop new products, with the ambition of coalescing sports betting and fantasy sports games. The deal also states Metric will provide traditional sports betting products for Scout’s Betflex application.
However, the firm may face challenges if it wishes to enter New York after a judge in Albany this week ruled daily fantasy sports are a form of gambling and should be illegal in the state.
Scout is headquartered in Stockholm, Sweden, and also has operations in both Norway and Ukraine. The company is listed on Nasdaq First North, a division of Nasdaq Nordic.