For 2025, the company plans a second round of acquisitions with an amount that can reach up to R$ 300 million (US$ 55m). The new legislation allows private companies to operate online sports betting, such as bookmakers and casinos.
“The regulation will boost business in a sector that accounts for around 1% of GDP and had revenues of around R$ 120 billion (US$ 22bn) last year,” highlights the company’s CEO in Brazil, Brunno Galvão.
The market is following the progress of the regulation, which will be sanctioned in December 2023, through the approval of specific ordinances. The transfer is one of the expected impacts of the regulatory process, which should reduce the number of players and open the Brazilian market to international investments, as Galvão notes.
Crowstone Ventures operates by acquiring control in businesses linked to the betting market, creating businesses from scratch that rely on capital from the fund to grow, and ?embryonic startups that offer solutions for the iGaming sector.
“We have structured a mergers and acquisitions arm - which is independent of the venture builder - to evaluate foreign players in the acquisition of businesses in Brazil, in addition to evaluating Brazilian businesses seeking to raise investment or sell the business,” points out the CEO in Brazil.
Crownstone Ventures is looking for companies that will not enter international markets and is also looking for startups that are active in the sector with technology solutions. The focus is on betting companies with revenues of R$20 million (US$ 3.6m) to R$ 100 million (US$18.3 m) per year.
About a year ago, the company made its first acquisition, NoHype, an affiliate community that, in that period, saw its number of members grow from 6,000 to 12,000. NoHype transacts R$ 20 million (US$ 3.6m) in deposits per month.
The second investment was Elisa.bet, which was created with the purpose of being a home for influencers, artists and affiliates. In the first three months since its creation, it reached 1 million players in Brazil, and today it has 600 thousand active players.
Elisa.bet also intends to be among the companies that sponsor major clubs and this year it almost signed with one of the major Brazilian teams.
The companies' divestment radar depends on the business, but the goal is fiveyears. “We believe strongly in the affiliate market and are analyzing other affiliate communities for acquisition,” he says.
“There is a very promising and billion-dollar market for technology and advertising companies with the regulation of betting. We are talking about a market with gross gaming revenue (gross gaming revenue) of over R$35 billion (US$ 6.4bn),” says Galvão.
One of the driving factors is the capture and retention of users and bettors. “These are two things that go hand in hand and it is only with the combination of both factors that a bet survives, in my view as an investor in the sector,” he explains.
In more mature markets, such as Europe and the US, it is possible to observe a high retention rate of powerful users.
“Whoever, in the regulated Brazilian market, offers the best solutions to capture, retain, and even qualify users, will be able to receive large investments,” he adds. Galvão has already developed startups in marketplace, e-commerce, and mobile app markets, and is also an angel investor.
Crownstone Ventures is a venture builder specializing in the sports betting, lottery and casino universe in Brazil, and carries out mergers and acquisitions in the sector, both for itself and for other players.
It operates from its own investment fund for the sector, investing in businesses that operate throughout the value chain, benefiting players looking for fun and profit (B2C) and bookmakers, lotteries and casinos (B2B) that want to attract and become more profitable.
Its first investments are NoHype, an affiliate community with over 12 thousand members, which transacts R$20 million (US$ 3.6m) in deposits per month, and Elisa.bet, which was created with the purpose of being a home for influencers, artists and affiliates, and which in the first three months reached 1 million players in Brazil.
Source: GMB
