A Triangle startup developing a stock exchange for fantasy sports teams and players – not Nasdaq companies – has big plans for the 2022 Fifa World Cup, which kicks off this weekend in Qatar.
Fandex's first big pay-to-play experiment is set to debut – a contest in partnership with a European betting firm – and the stakes are high for the 3-year-old startup.
The idea came from students in a Duke University sports business class. Fandex co-creator Ed Tiryakian has been teaching at Duke for 12 years. But he’s done sports agency work and “knows a lot of athletes,” so the idea was intriguing enough to jump on, he said.
Tiryakian's students began to collaborate with likeminded students at Stanford University. And the concept became Fandex. Initial discussions surrounded the idea that traditional sports betting is binary – there are winners and losers.
“We spent a lot of time going over, how can you get every fan base involved, even if their team is bad?” Tiryakian said.
Fandex develops contests where an algorithm determines games a team is supposed to win. Players make their predictions on whether a team will perform as expected and share prices go up or down based on both the algorithm and player expectations.
The idea gained steam in 2018 and the team applied to patent the idea of a stock exchange based on players and teams with predicted outcomes. The patent was awarded earlier this year.
“Betting is binary … but this is much more transcendent,” Tiryakian said. “It allows you to sort of get in, get out, keep playing.”
Already, about a dozen leagues are set up with Fandex and a handful of players. Armed with its new patent, the company hopes to explore partnerships with bigger concerns.
It’s partnered with FanDuel in the past – and is looking to work with more online gambling players.
But it’s challenging. Up until this point, the firm’s platform has been free to play.
“We’re looking to transition to a pay to play model,” he said. “It’s a different set of circumstances … a different set of constraints.”
Should the firm be successful in landing a major partnership, “we see this getting to be a different way, but a substantial way, to increase the sports betting side of things.”
Tiryakian has big ambitions. Already, he’s had “a lot of discussions with a lot of leagues,” and with the new patent’s approval, he’s expecting those conversations to only increase.
The company, which will likely pursue additional capital in 2023, has raised about $2 million so far.