Genius Sports’ move to go public in a $1.5 billion deal with dMY Technology Group II, a SPAC traded under the ticker DMYD, marks a new phase for the London-based sports data and technology firm. Genius Sports cofounder and CEO Mark Locke took time this morning from courting investors and the general media to speak with Sportico about the decision to go public with a New York Stock Exchange listing and what the future holds for Genius’ growth. Our conversation has been lightly edited for clarity.
Sportico: Congratulations, I know this is quite the milestone for you, having been building this business since 2001.
Mark Locke: I’m delighted, and I want to start by saying what an amazing milestone this is in Genius’ history. We’ve seen tremendous growth over the past few years, and that’s expected to double by 2025. Against this backdrop, our U.S. listing strengthens our position at the heart of the global sports and betting ecosystem.
Sportico: How has the industry evolved and where do you see it going?
ML: I’m enormously proud of what the team’s achieved. It’s a fantastic thing we’ve been able to do: the evolution of live betting, culminating today where we’re offering almost a quarter of a million events in a mature sports betting market. What we’re seeing in the U.K., Europe and in mature markets is live betting—the DNA of what we are—is 70% to 80% of all [betting] revenue. America is not at that level yet, where it’s only 10% to 20%. We expect live betting really to come through and be front-and-center in the way a sportsbook delivers its products and engages its customers going forward. The experience we have had over the past 20 years based on our software developing expertise, our ability to provide cutting-edge products to our sportsbooks and our absolute belief in official data and a sport’s right to own, control and benefit from the inherent IP that exists within it is something that will put us in a very good position to capture the opportunity presented to us in both the U.S. market and other emerging markets.
Sportico: You’ve touched on this a bit already: Why go public in the U.S. and not the U.K.?
ML: The U.S. market is nascent. It’s growing very, very rapidly, with more and more states coming online. Genius Sports has positioned itself really well in the U.S. market with the amount of data and content it has and the relationships it has with the sports leagues. To position ourselves in probably the fastest-growing market in the world is a natural thing to do.
Sportico: What was behind the decision to team with a blank-check company, and specifically dMY Technology II and its founders Niccolo de Masi and Harry You?
ML: Two years ago we were acquired by Apax, a fantastic partner that has really enabled us to accelerate our growth. Over time we’ve been approached by a number of SPACs and other people. What Niccolo and Harry both give us is experience in the capital markets, excellent contacts and good experience in the U.S. gaming sector. More importantly, with Apax remaining the largest institutional shareholder we’ve also been, through this process, able to introduce some experienced, very significant shareholders into the mix.
Sportico: Going public, you’re going to be asked a lot more questions about financials. Let me start: Can you give us a breakdown of Genius Sports’ business right now?
ML: Europe is our core, where we’re strongest. Even there we’re seeing strong, consistent growth. We’ve had over 250% increase over the past four years and even during COVID the business is performing quite well, with over 25% growth. In the sector and amongst our peers we are performing extremely well. Going forward, we’re seeing the operational leverage in the business coming through. The U.S., while it’s a relatively small part of the business, is an incredibly fast-growing part of the business, growing at 70% a year. We’re seeing a lot of opportunity in the States, and it’s going to be a big focus. Saying that, we shouldn’t forget this is a truly global business. There are lots of opportunities worldwide. Parts of South America are becoming regulated and online; there’s the German market, which is a huge opportunity just starting to open up. We’re in an extremely strong place to capture not only the opportunities of the U.S. market but the wider global regulation.
Sportico: With the transaction to go public likely closing in the first quarter of 2021, how do you think investors should start evaluating Genius Sports?
ML: Genius can in some ways almost be viewed as an ETF. Because we’re providing so many of the global sportsbooks with so much of their product set, as regulation increases worldwide, as more customers come online and as our customers—who are ultimately the biggest sportsbooks in the world—continue to be successful in embracing new emerging markets, we’re able to provide services to all of them. We’re not in the place where you have to choose a winner, as an investor. An investment in Genius allows you to take a position in all global markets and the increased regulation of online betting.
Sportico: Mark, thank you for your time and insights.