Sporttrade's rise in business has paralleled the course of the NFL season, and like many Philadelphia Eagles and Kansas City Chiefs players, it's looking at Super Bowl Sunday as a monumental day.
The past six weeks have moved the needle for the five-month-old Camden startup, which allows customers to trade bets much like they would on the stock exchange. Sporttrade has doubled its customer base since the last week of the regular season, set its daily mark for new customers added during the NFC and AFC championship games and is closing in on $35 million in shares traded. Sporttrade CEO and Drexel graduate Alex Kane said that the app could see 5% to 8% of its total bets ever on the Super Bowl.
As an example of how the startup works, Kane said one better on the app bought 128 shares of a bet on the Chiefs to win the Super Bowl at a price of $13.50 per share before they made it to the big game. With two teams left and the likelihood of a Chiefs Super Bowl victory higher, that bet is now worth $46 because the Chiefs have about a 46% chance of winning Sunday, according to Sporttrade’s odds. Right now, the bettor would be able to profit $32.50 per share on the bet by selling it, so it has an unrealized profit of $4,160. Each share is $100 of risk, so if the bettor doesn't sell the bet, he can win $8,650 by making $86.50 per share with a Chiefs win. If the Chiefs lose the bettor makes nothing.
Like stock trading, the goal is to buy low and sell high.
Sporttrade is backed $36 million in venture capital funding, including an investment from former Nasdaq Stock Exchange President Tom Wittman.
The Super Bowl creates new opportunities.
For the first time, the platform is introducing prop bets for the game, such as which players will score touchdowns, or how many yards a certain player will have. Kane sees most of the action on bets happening as games progress, so Sporttrade won't have some popular Super Bowl prop bets like how long the National Anthem will last or what the first commercial will be. Instead users can bet on instances that are determined over the course of the game, like whether it will go into overtime or if the final score is one that has never happened before in NFL history, called "scorigami."
Kane said the playoff run has been especially important in customer acquisition.The platform is currently up to about 1,000 users, thanks to a 50-customer bump on Thursday. Though he said it's still currently a "smaller user base," the NFL season, and the playoffs specifically, is helping his team "really find out what works" as the app continues to grow.
"We have this nucleus of a bunch of customers who really feel like they're helping us build the product," Kane said.
Sporttrade has also been active on social media throughout the playoffs, doing vlogs, a livestream during Championship Sunday that garnered over 60,000 viewers and currently has a raffle for the Super Bowl that is at 600 entries, which Kane thinks will get to the thousands by Sunday. Five winners will receive $4,000 each.
Kane will be following along with those users as bets are traded and odds change in real time on the Sporttrade app, but like many in the Philadelphia area, he's got his money on the Birds.
"I mean, of course I'm betting on the Eagles," Kane said. "I bet on the Eagles a couple of weeks ago to win [the Super Bowl], so I'm kind of sitting on that."
