2 min read
How Sky Bet broke loose and flourished into a Leeds unicorn
It’s not very often that you hear a tech CEO say “we just lost £1 million” and they’re not worried about it. But when the CEO in question is Richard Flint of Sky Bet and it’s a few hours after Donald Trump’s surprise US election victory, it makes sense.
With an estimated valuation upwards of £1 billion, Leeds-based Sky Bet is keen to be acknowledged as a unicorn. Valued at £800 million in 2015, the company grew 36 percent that year and another 50 percent this year. So, while he has no formal valuation to draw on, Flint is confident it’s passed the magical £1 billion figure to join the UK’s unicorn club.
Sky Bet (or Sky Betting & Gaming, to give it its full name) has its roots in the late 1990s and a collection of online sports products under the Sports Internet Group umbrella. In 2000, broadcaster BSkyB bought the group’s betting arm, Surrey Sports. It was rebranded as Sky Bet two years later.
Non-core, you know the score
The early days were all about betting on sports via TV remote controls. Interactive TV tech in general proved to be unappealing to the masses, so in 2008 the business refocused on betting via the web. Using Sky’s brand to stand out in a competitive market, the company grew and turned a profit every year since then.
And yet life wasn’t perfect within Sky. “We’d become too big to be ignored, but too non-core to be properly understood,” says Flint, who has run the company since 2006. The volatility of a gambling business that regularly has to pay out huge amounts of cash didn’t gel with Sky’s core customer subscription model. When you’re a big betting company, payouts can sometimes be huge. Sky Bet had to pay £4.7 million to customers when Leicester won the Premier League, for example.
Flint says the company struggled to get the investment and resources it needed within the broadcaster’s enormous operation. “We’d slip down the list of priorities because we weren’t really core. Having days where we lost millions of pounds (in payouts), as the business got bigger, became less a sustainable situation.”
Flying the nest
So in 2015, Sky Betting & Gaming went independent again in a private equity deal with CVC Capital Partners. As a standalone company, it can grow on its own terms. It has the competitive advantage of being able to use a brand well known in key markets across Europe, as Sky retains a 20 percent stake in the business.
Now employing 1,200 people in Leeds and Sheffield, Sky Betting & Gaming offers a range of mobile gambling apps and websites focused on sports and casino-style games. The main Sky Bet app handles as many as 100 bets per second during peak times.
Flint says Leeds is a good place for a technology company and that it has a lot of the ingredients of a successful digital city set out in hit book The Flat White Economy. These include good connectivity and transport links, and a talent pipeline from local universities.
While the company would have access to more talent if it was based in London, Flint is happy in Yorkshire. “I’d rather take time to recruit a skilled team that are then loyal to you than have people go off to other roles. We have people who are committed to the company, and in return we’re committed to them with lots of opportunities, social activities and a flat structure.”
One thing Flint wishes Leeds had is better transport links with Manchester, so he could attract more staff from across the Pennines. The company’s 100-strong Sheffield office was set up to access a wider pool of talent, while being close enough (around 30 miles) to make in-person meetings easy.
To the future
Sky Bet is starting to venture beyond UK shores. It launched in Italy last week and a German roll-out will follow. It’s no coincidence that Sky has TV operations in both countries, and Flint sees these markets as big opportunities to further grow the company. More broadly, he still sees potential in converting betting shop diehards into digital customers.
Considering the company’s private equity backers, it’s no surprise that an IPO or private sale is on the cards for the future, although there’s no timeline for those plans. “It depends on our own growth, but also on the markets.”
Flint pauses for a second to consider the market turmoil that day, as the world gets used to the idea of President Trump. “I wouldn’t want to be doing an IPO today,” he chuckles.