Fantasy teams and gambling have forever altered the world of sports fandom. The shift toward consuming sports in different ways — and the progression of companies beginning to think about a Web3 future where business occurs on the blockchain — led SimBull Sports Exchange CEO Kenneth Giles to think: “Why is there not an investment […]
Already a subscriber? Log in
Want to Read More?
Get immediate, unlimited access to all subscriber content and much more.
Learn more in our subscriber FAQ.
- Unparalleled business coverage of the Iowa City / Cedar Rapids corridor.
- Immediate access to subscriber-only content on our website.
- 26 issues per year delivered digitally, in print or both.
- Support locally owned and operated journalism.
Fantasy teams and gambling have forever altered the world of sports fandom. The shift toward consuming sports in different ways — and the progression of companies beginning to think about a Web3 future where business occurs on the blockchain — led SimBull Sports Exchange CEO Kenneth Giles to think: “Why is there not an investment platform for sports teams?”
So Mr. Giles and Dallas Klein, the company’s co-founder and fellow Xavier High School graduate, combined their passions for sports and finance to give sports fans a way to invest in something they already know a lot about, rather than randomly picking individual stocks or volatile cryptocurrencies.
Each user can buy stock in an NFL, MLB, NBA, NHL or NCAAF team on simbull.com. For example, if the person believes the University of Iowa football team is poised for a big year, but the stock price is deemed too low in their eyes, then they might be persuaded to invest in SimHawkeyes on the belief that the market is undervaluing the team’s potential, similar to the traditional stock market. If more users buy a specific team, the price increases in value and vice versa.
Users also receive cash payouts every time a team they’re invested in wins, modeled after stock market dividends.
SimBull is not classified as gambling because users technically invest in redeemable physical pennants represented by the virtual shares, so the exchange is already available in all 50 states.
In March 2020, the site had 3,000 registered accounts. Then, by the middle of last year, a leading football analytics company in Cincinnati called Pro Football Focus (PFF) shouted out SimBull on a podcast, prompting the founders to set up a meeting where they pitched their business. As a result, more than 12,000 registered accounts exist on SimBull, a growth they partly attribute to the PFF partnership.
The idea has showed enough promise that SimBull was selected for the 2022 Techstars Sports Tech Melbourne Accelerator – a 13-week virtual boot camp and mentorship opportunity with leading sports tech industry professionals. The program has an acceptance rate of just over 1%. The accelerator started in late March and will run through June 16.
“All startups in this year’s class are building software-led businesses that can rapidly scale,” Techstars managing director Todd Deacon said in a blog post.
Mr. Giles said the idea popped into his head after graduating from the University of St. Thomas in St. Paul, Minnesota, in May 2020. Already interested in finance, he noticed the surge in market-based investing in sectors like NFTs and cryptocurrency – even from casual investors who didn’t have much knowledge.
Mr. Giles hopes the experience will help them transition SimBull onto blockchain technology, giving customers additional security and transparency, utilizing the liquidity of NFTs and realizing extra perks. They also hope the accelerator will guide them in launching a mobile app by the end of April and narrowing down marketing tactics to help scale growth. In addition, they want to expand into soccer, Australian rules football, and women’s sports.
“Long-term, our goal is to be the number one sports entertainment app that allows users to prop up their sports knowledge,” he said. “Right now, we’re doing that through teams. We want to add more teams, more leagues and also go into individual players. Bringing the idea of fan ownership and fan engagement with individual players…I think that’ll be a huge thing for our platform down the road. Maybe you can buy virtual shares in college athletes, so when they get to the pros, you bought them early, and you’ll be able to ‘sell’ for profit. That’ll be a few years down the road, but it’s definitely on the roadmap.”
