Closing the circle
Through its acquisition of platform provider Optima, Sportradar can now claim to offer every link in the betting chain to clients. Chief executive Carsten Koerl and Optima boss Jacob Lopez talk Daniel O’Boyle through the deal
As any executive knows, proper due diligence is key to the success of any acquisition. And in this respect, Sportradar held an advantage over most when it was on the hunt for a sports betting platform.
Working with a variety of suppliers as a data provider, the company has an intricate knowledge of the range on offer in the industry.
“Being in our position, we work with almost every player in the market and we get a very good look at what kind of features and what kind of platforms are in the market,” Sportradar chief executive Carsten Koerl explains.
“We are operating with most of the platforms who are out there. We have a very good view of what the companies are in the market and what features they offer, so we looked into many players.”
In the end it proved to be Optima, the Spain-based platform provider founded in 2012 by former Stan James chief technology officer Jacob Lopez, that Sportradar purchased for an undisclosed fee.
Rather than being an obviously hot property in its sphere, Optima, by Lopez’s own admission, wasn’t growing rapidly. Sports betting, after all, is a highly competitive space in which the likes of SBTech, SG Digital’s OpenBet, with the likes of Playtech, Amelco, Kambi are all jostling for market share.
While the product Sportradar had seen as a data provider played a part, Koerl said that it was just one in a range of factors the supplier considered when picking its target.
“We base our decisions not only on product but also based on price, based on integration and based on future features,” Koerl says. “On those metrics, Optima turned out as the most attractive.”
It wasn’t a quick decision, he adds.
“It was really a mix of factors, but what was very important for us were some questions: What is the scalability of the platform?, What is the underlying technology behind it? and How can we really process a high volume and guarantee to clients a very high service level?
“Those were very important to us and we believe Optima is top level for this,” he says. “There are for sure others in the market who are not bad, but we believe from a scalability perspective and a stability perspective Optima is outstanding.”
For Optima, meanwhile, the prospect of a deal wasn’t always particularly attractive.
Since the company’s formation in 2012, it had never received outside investment. This, Lopez says, was deliberate, as it allowed the business to avoid external pressure for short-term gains, and instead focus on longer-term, sustainable growth.
“One of our main concerns if we would do a deal like this is that we wouldn’t have the same flexibility and let us continue to have the same attention to detail with operators we have today,” he explains.
However, he adds, Lopez ultimately concluded that Sportradar was prepared to support this approach, which played a key role in convincing him the deal was right for his company.
“We have a very well-aligned vision,” he says. “The vision, the technology and the product that we have and the way we approach business. We work very hard to make sure sure our product stands out.”
Completing the set
And now Sportradar can provide every link in the sports betting supply chain, a huge leap from its early days as a pre-match data provider. It’s been a gradual process, which has seen it add an odds comparison tool, live data, client registration, liquidity management and managed trading services over the years, slowly but surely filing any gaps in the business.
“It was very clear from the very beginning that we started with the basement, which is data and we made our way to the core function which is the platform,” Koerl explains. “And we developed that step by step.”
This also means that it will now find itself competing against the companies it works closely with as a data provider. Of course, all its related solutions will remain platform agnostic, allowing these relationships to continue.
And it’s not as if Sportradar is going to aggressively compete from the off. Koerl estimates the process to fully integrate Optima with its products and services will take up to two years, though the platform is immediately available to existing and prospective clients.
While he claims Sportradar is targeting deals with top-tier operators, Koerl is under no illusions as the competition it will face for these deals, not just from rival platforms, but also from in-house solutions.
“This can be difficult because they have their own platforms [that] they all believe in,” he says.
“But we believe that betting providers should maybe focus more on the licensing and marketing because looking at things from an efficiency perspective we can do these things more efficiently than in-house – that’s the underlying assumption.”
It’s a major step forward that many have believed to be coming, and one that opens up a new front for Sportradar to compete on. The US, where it serves as an official partner to the likes of the National Football League, Major League Baseball and the National Basketball Association, is one. Koerl even suggests China may offer opportunities in the near future.
It’s a bold move, and the competition will be fierce, but should Sportradar successfully position itself and the Optima platform as a viable alternative to the host of solutions already on the market, the rewards could be significant.