As Daily Fantasy Sports has taken off, some users have realized there may be an inequality that exists: the player with the most information and analytics has a huge advantage over someone relying purely on intuition. How is this problem being addressed? RotoQL equips FanDuel and DraftKing users with analytics and tools to improve Fantasy predictions, using the same information that pros use. The company plans to transition into the ultimate authority on sports moving from a tool to a complete sports data platform.
AlleyWatch spoke with CEO Justin Park about the startup and got the inside information on their latest round of funding.
Who were your investors and how much did you raise?
We raised $1.2M in a Seed round from Peter Blacklow the GP at Boston Seed Capital, Angel Tim McSweeney, Mark Mariani owner at VegasInsider, VP of Fox Sports Regional Networks Michael Spirito, Paul Beattie, and Ralph Topping.
Tell us about your product or service.
RotoQL’s vision is to be the world’s leading provider of tools and analytics to the fantasy sports community of 56 million, including both daily and season long fantasy sports competitors. Starting with the daily fantasy sports (DFS) vertical, RotoQL launched software — complete with predictive analytics, data and workflow tools — to users competing on DraftKings and FanDuel, the two leading DFS sites. After just twelve months of monetizing, RotoQL has become profitable and will generate seven-figure in revenue in 2017.
What inspired you to start the company?
CTO Frank Kim and myself had built and sold successful companies in the past and wanted to start something together. This was around 2015 and DFS was everywhere. By a random chance, a friend from school named Saahil Sud — a very highly ranked player decided to join us. So we decided to marry a strong tech background with player expertise that can’t be beat.
How is it different?
RotoQL is an equalizer in the daily fantasy space — empowering casual players with the same tools and analytics that professionals use. One customer, Michael Sugar, an Academy Award winning film producer says: “I stumbled upon RotoQL as I started playing DFS, as a hobby. I find the tool to be an invaluable resource for me, and have generated substantial income ever since.” Sugar is now regarded as one of the top earning players in the world, and is one of just 2 players who recently qualified for the World Championship for Basketball AND Hockey at the same time.
What market you are targeting and how big is it?
The daily fantasy sports community is estimated around 55 million, including both daily and season long fantasy sports competitors. DFS News reports that FanDuel and DraftKings attracted $3 billion in revenues in 2015.
What’s your business model?
We will transition from a tool provider to an indispensable platform for sports data. Think like a Bloomberg terminal for all sports data.
How does the regulatory environment around fantasy sports affect your future plans?
We are already proving a revenue model 7 months in, so we are not concerned at all by regulation. There is a bigger picture about the relationship that fans have with sports data. DraftKings/Fanduel is just one component of it.
With respect to what we provide now, DFS can be perceived to be unfair. Hardcore players use algorithms and data science to make lineups. But this is our opportunity to level the playing field and give the average person the ability to make these bets too.
What was the funding process like?
We sat down with a ton of players. Pros and the more casual players. Figured out a core differentiator. It has to do with the time component between people for building lineups while not sacrificing data. There are daily and season long players. It’s a big pain point we are addressing with a data-driven approach.
We raised half million from friends and family. Set up the site and providing core differentiator in Oct 2015.
What are the biggest challenges that you faced while raising capital?
Building products that will make casual players want to play more. But this is where the funding comes in. With the funding we will continue improving our DFS product and expand marketing. Secondly, we are going to build a mobile app to help season long fantasy sports players manage their teams through personalized news, injury/bye week replacement recommendations and more. The goal is to help users reduce time spent managing teams and increase their competitiveness.
What factors about your business led your investors to write the check?
There were a lot of people trying to do what we accomplished, but at the end of the day, they were just “me too” sites that didn’t give end users any real advantage. Our metrics and results proved to investors that we are different.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Step 1: generate revenue
Step 2: fine tune product and marketing so the unit economics are viable
Where do you see the company going now over the near term?
We will expand the user base by making tools for more casual players in monthly and annual DFS.