Back in 2019, Ted Mauze’s group chat was heavy on sports betting conversation. He and his high school friends would text nightly about games and lines, place wagers across multiple sportsbooks, use ESPN or Bleacher Report to get their score updates and manually track their wins and losses. The need to constantly toggle between apps led to the formation of Chalkboard, a new messaging platform that has set out to close the loop for social sports bettors and become the “Discord of sports betting.” Mauze, the company’s co-founder and CEO, explained, “The idea was to build a product with scores, with bet tracking, that would become the communications center for sports betting—to productize the group chat we’ve had for the last [few] years.” Former NBA player-turned-investor Baron Davis and Los Angeles Clippers star Paul George have backed the company, participating in the approximately $1.5 million pre-seed round that just closed.
JWS’ Take: Discord was initially released in 2015 as a cross-platform communications tool for gamers. The increasingly popular VoIP, instant messaging and digital distribution app has since scaled out, constructing communities for fans of other subjects—including NFTs and sports betting.
Mauze recognizes that it won’t be easy to attract sports bettors, who have already become accustomed to using Discord (or any other group chat platform, for that matter). But he thinks it’s possible. He explained to do so, a new social platform must either be “hyper-compelling” (i.e. TikTok) or have a tool associated with it. “It needs to solve a problem to go with the social experience,” he said.
Chalkboard believes its BookSync integrations (think: wagers placed on any book automatically appear within the app, enabling the bettor to easily track performance) and proprietary tailing functionality (enables the sharing of one-click betting slips) are tools that will make it a worthwhile resource to the casual sports bettor who gambles as a social activity. “We’re trying to break down the friction of friends betting together, a behavior that is very, very common,” Mauze explained.
Chalkboard is not the only startup striving to become the social platform for sports betting. Betsperts and Bookit Sports are also working to assume that role. Benjie Cherniak (principal, Avenue H Capital) said he could envision a company serving that purpose. “As you look at the next generation of sports bettors, an emerging segment of the audience is looking for a different kind of experience from what is prevalent today, and that includes an enhanced social communication dynamic,” he said.
Chalkboard’s small group-focused thesis varies from the competitors cited. “We believe that the real powerful [form of] engagement is messaging,” Mauze said. “It is you and your close group of friends in a group chat. [We’re] less believers in the traditional user feed, where [a bettor] is just going to post their bets and be like, ‘What do you think?’ While there may be some of that behavior, now you are just replicating gambling Twitter. And the TAM of [people engaged in group chats with their friends] is much bigger than the number of people that want to post into an internet feed.” Betsperts and Bookit both utilize a traditional social feed.
While the Chalkboard approach focuses first on small groups, the company is not ignoring the larger sports betting communities that currently reside on Discord and Slack. “We’re also building after the Discord server model, knowing that people are looking to be a part of a community,” Mauze said. “There is a general chat. There is a questions chat. So, if you don’t have a friend group at home that likes to bet on sports, but you like to bet on sports, this is [still] an awesome place to fall into.”
It didn’t take long for Baron Davis to see Mauze’s vision for Chalkboard. The two-time NBA All-Star invested in, and sits on the Advisory Board of, Sleeper (think: Discord for fantasy sports). While that company may lack mainstream prominence, it has more than 3 million active users, a top-50 user-retention ranking within the App Store and a long list of high-profile investors (including Andreesen Horowitz, which led a $40 million Series C round at a $400 million valuation). “I was drawn to Chalkboard because, to me, it felt like their mission and their product were aligned with what I believe to be the future of sports tech—specialized, focused, social spaces for fans,” Davis said. “Just as Sleeper brought the key fantasy sports experiences of drafting, competing and group messaging under one roof, Chalkboard aims to create an all-encompassing and fully integrated social messaging space for sports bettors. Given the success I’ve witnessed with the former, partnering with the latter was an easy decision.”
From a social experience and engagement standpoint, Sleeper is a strong comp for Chalkboard. But the companies have vastly different business models. While Sleeper is working to leverage the data it aggregates from a large, highly engaged audience to push real-money prop bet parlays (which technically qualify as DFS, not sports betting in 49 states), Chalkboard plans to chase the sports betting affiliate opportunity.
We say “plans to” because the company has not yet tried to monetize its product. At this point, its focus remains on trying to build an app that is valuable enough to draw groups of sports bettors from other social platforms and sticky enough to retain them. “Without scale it is really hard to monetize,” Mauze said.
Chalkboard needs scale because the company is a bit further downstream than the content-driven affiliates that drive first-time deposits. Remember, one of Chalkboard’s big selling points is that the bettor can sync all of their sports betting accounts within the app. So, “the new user [sign-up] play is not going to be as prominent,” Mauze said.
Instead, the company intends to leverage its proprietary tailing functionality to drive affiliate revenue. “We’re trying to embed an affiliate opportunity within shared bets, [the conversation] about bets and betting with your friends,” Mauze said.
Cherniak (who is not invested in Chalkboard) is intrigued by the concept of an affiliate business driving handle and user growth from existing players. “Fast forward a couple of years from now when [bettors] are already registered with a bunch of sportsbooks: Is there going to be an appetite for operators to engage and partner with entities that are using call-to-action and social engagement to get customers who are already betting with you, but betting in other sports books as well, to come back to you specifically?” he wondered. “I think that gets interesting [if they can build up a large, engaged community].”
Mauze was hesitant to characterize Chalkboard as solely an affiliate play. He said if the company can get the product right, there will be opportunities to integrate analytics capabilities (which they can charge for) and other paywalled content into the platform. A social-first platform with high engagement should also command higher multiples than your typical content-driven affiliate business.