Dublin’s Banach scooped up by Australian bookmaker in $43m deal

16 Mar 2021

Image: © karaboux/Stock.adobe.com

The start-up, which develops software for the sports gambling industry, has been purchased by PointsBet. Co-founder Mark Hughes will become COO of the Australian bookmaker.

Banach Technology, a betting software start-up, has been acquired by an Australian bookmaker for $43m as part of its plans to push deeper into the US market.

The Dublin-based start-up, which was founded by a group of former Paddy Power staffers, develops under-the-bonnet software for betting companies. It is used to generate personalised features for customers, such as in-play bets.

Founders Mark Hughes, Alex Zevenbergen, Rob Reck and Hadrien Lepretre all worked at Paddy Power as quantitative analysts and data scientists.

PointsBet is an online bookmaker based in Australia with a US headquarters in Denver. It acquired Banach through its Irish subsidiary, Lockspell, in a deal that values the start-up at $43m. The deal is mostly in cash with the Australian company investing $4m into Banach’s operations.

The start-up had previously raised funding from David Power, the co-founder of Paddy Power, and James Mangan, another former executive at the gambling giant. It employs 40 people.

Hughes, who was chief executive, will now become chief operating officer of PointBets. The other co-founders will remain with the company as well.

“I am extremely proud of the business and team we have built over the last few years,” Hughes said. “We could not be more excited about the burgeoning US opportunity and the role that the Banach team will play in accelerating and strengthening PointsBet’s pre-game, in-play and free-to-play offering in the United States.”

The acquisition is expected to bolster PointsBet’s expansion into the US sports betting market, particularly in the area of in-play betting, as regulation around gambling is loosening up.

PointsBet chief executive Johnny Aitken told CNBC that currently around 50pc of bets in the US are placed during play.

“Within three years, our expectation is roughly 75pc of bets will be placed in-play. So the future of the US sports betting opportunity is in-play,” he said.

The acquisition of Banach is expected to close next month.

Jonathan Keane is a freelance business and technology journalist based in Dublin