Welcome to the January 2022 newsletter for the Waterhouse VC Fund.

The Fund specialises in global publicly listed and private businesses related to wagering and gaming. The Waterhouse family has been involved in these industries for over 100 years, and the family’s experience, contacts, and capital provide opportunities that most investors would neither appreciate nor have access to.

Since inception in August 2019, the Waterhouse VC Fund has achieved a total return of 2,293% (assuming the reinvestment of all distributions) as at 31 December 2021. See our long-term performance table at the end of this newsletter.

Time for a change

Wagering apps have maintained a consistent information architecture for decades, typically structuring their layout by heavily featuring promotions at the top, then providing some high level navigation to the most popular sports, and then giving prominence to the ‘next to jump’ for the major racing codes. This one-size-fits-all approach buries many popular sports and bet types deep in the app.

New customers are often overwhelmed by the depth and complexity of what they see on existing wagering apps. The current marketing and product offering of wagering companies assumes the bettor is experienced, and essentially asks them to wade through all the content to find the few things they actually want to bet on.

In contrast, the most popular products globally have natural language (writing or speaking to search, such as Alexa and Siri) navigation front and centre. This allows for an easy user-driven experience.

*Natural language search is front and centre for the most popular products in the world. Source: Voxbet*

Natural language navigation has been supported by multiple structural tailwinds, with 50% of 16-24 year olds already using voice search compared to just 23% of 55-64 year olds (Statista 2019). Consequently, natural language navigation gives wagering operators the opportunity to cater to the preferences of a younger customer cohort.

Waterhouse VC is assessing companies that advance natural language navigation for wagering operators. We are confident in the continued growth of natural language navigation and believe that there is a significant opportunity to simplify the user experience for bettors. We are particularly interested in technology that allows bettors to engage with sports betting the way they already engage with everything else online: the journey begins with speaking or typing what you want.

Are you listening?

One company with such technological capabilities is Voxbet. A bettor can use Voxbet’s technology directly through Viber, Telegram and other popular messaging services. For example, a user could type or say ‘$5 Germany-Portugal 2-1 and Ronaldo to score’ to place a $5 bet on this outcome directly through voice/text. The technology can also be implemented as an event finder (for example, typing ‘Germany-Portugal’ to receive all possible wagering options on the Germany-Portugal game). Today, Voxbet’s platform processes over 1,000,000 messages per month.

When Voxbet introduced French language capabilities, the company achieved 65% text recognition after 3 weeks and over 90% recognition within 3 months, effectively demonstrating the capabilities of the company’s advanced underlying technology. Voxbet drives an extraordinary 160 bets per client per month for PMU (a leading French operator), far more than any other bookmaker achieves through complex apps and web channels. For PMU alone, Voxbet processes over 600 written bets per minute.

The future is conversational

Voxbet’s technology ensures that the search for wagering opportunities is driven by the choice of the bettor rather than the sportsbook. One of Voxbet’s key advantages over Alexa and Siri is the technology’s ability to recognise unique wagering terminology (such as, ‘Each Way’, ‘All To Win’, etc.), which would not be discerned by existing natural language navigation tools. Voxbet’s technology speaks ‘punter’ and can understand betting jargon.

The solution can be implemented to display live odds on request whilst streaming sports on mobile via an unobtrusive betting widget. A bettor could then place bets through the same widget. This would provide the bettor with a seamless visual wagering experience.

Additionally, Voxbet’s technology can be used through social media. Many wagering operators have not successfully adapted to the interactive opportunity of social media. Interacting with stars and influencers through platforms such as Twitter to rapidly place bets both increases turnover and serves as free marketing for the bookmaker. For example, a bettor can ask a celebrity or public figure the following request (mockup) and instantaneously receive a link to confirm the wager.

*A mockup of building a betslip on social media. Source: Voxbet*

Voxbet takes a small percentage of turnover processed through its technology. The company does not hold customer or financial data, nor does it hold any money. The business purely facilitates wagers.

Media: Gaming Intelligence

In December, Waterhouse VC’s investment in Voxbet was highlighted by multiple industry publications, including Gaming Intelligence - ‘Voxbet Secures Funding from Tekkorp Capital and Waterhouse VC’.

Voxbet’s founder, Jonathan Power, said: “We’re thrilled to be joined on our journey by such excellent company. In leveraging their collective understanding and expertise, alongside an extensive network of long-standing relationships, Voxbet is instantly better-placed to strategically identify and execute on our next important steps.”

Please note the above information in relation to Voxbet is based on publicly available information in relation to the companies and should not be considered nor construed as financial product advice. The Fund currently has a position in Voxbet. The information provided in this document is general information only and does not constitute investment or other advice. Readers should consult and rely on professional investment advice specific to their individual circumstances.