PlayUp Ltd. is merging with a special purpose acquisition company in a deal that will value the online betting operator at $350 million.
The transaction with IG Acquisition Corp. will help fund expansion of the business and is expected to close in the first quarter, the companies said in a statement. A fund managed by Yorkville Advisors Global has agreed to invest an additional $70 million in the business.
PlayUp allows fans to bet on sports, horse racing and daily fantasy sports in Australia, New Zealand and India. The company recently entered the U.S. market. For the year ended June 30, PlayUp had gross revenue of $36.6 million, up from $23.4 million the previous year.
IG raised $300 million in its initial public offering in 2020. The SPAC is run by Bradley Tusk, a venture capitalist and a consultant who has worked with FanDuel Inc. Tusk was also a campaign manager for Michael Bloomberg, the owner of Bloomberg LP who was a three-term mayor of New York.
Shares of sports-betting operators have tumbled this year as investors have grown wary of ongoing losses and the cost of acquiring new customers. DraftKings Inc., which went public in a $3.3 billion SPAC deal in 2020, has fallen 39 percent this year.
PlayUp has the ability to offer several types of wagers on one app, including bets on sports, casino games and even esports, where it’s legal, according to Tusk. That will allow it to target customers through niche media channels and not pricey TV ads.
“I don’t want to compete in the traditional sports betting market,” Tusk said in an interview. “It’s too expensive.”