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| TWO high-profile
survivors of the dot-com era are poised to share in the IPO fortune from
Betfair, the online betting exchange. The company plans to float on the stockmarket this year. Ed Wray, a former investment banker, and Andrew Black, a professional gambler and former derivatives expert, between them own slightly less than a quarter of Betfair. While in their thirties, Mr Wray, 42, and Mr Black, 46, co-founded Betfair as a tiny internet start-up in August 1999, when other internet pioneers, such as Martha Lane Fox, who co-founded Lastminute.com, were their juniors by as much as a decade. Mr Wray and Mr Black had grown so frustrated at the profits being made by traditional high street bookmakers that they decided to set up on their own. Betfair takes a commission of between 2 per cent and 5 per cent on all winning bets. Customers have to register, set up an account and deposit funds before they can begin trading bets. The pair have turned Betfair, which matches buyers and sellers of betting positions, into a highly profitable business, with annual revenues of more than £300m ($528m) and in excess of three million customers. It is Britain's biggest online betting company, employing more than 2300 staff, with operational bases in Malta and Tasmania and satellite offices in Spain, Italy, Romania and Germany. It made profits before exceptionals for the year to April 2009 of just over £70m. Betfair, which has been the subject of persistent rumours that it will list its shares - it abandoned float plans in 2005 - is understood to be close to finalising a listing for as early as September. The flotation, which would also land windfalls for some of the friends and family who backed Betfair at its inception, looks set to value the company at up to £1.5 billion. Softbank, the Japanese bank that owns about 23 per cent of Betfair, could also use the flotation as a chance to shed some of its holding for a healthy profit. Other investors include Balderton Capital, a private equity venture that owns a 7 per cent stake valued at about £105m. Floating would give Betfair shares to use as an acquisition currency so that it could take part in the consolidation of the fragmented online gaming market. It was unclear last night whether the company would use a listing to raise fresh capital. |
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