PlayUp searches for $10m as it untangles itself from FTX deal

afr.com:

PlayUp, a fantasy sports gambling outfit once backed by the family of former prime minister Malcolm Turnbull, is searching for investors to back a $10 million capital raise after a failed effort to list in the United States.

PlayUp’s attempts to list on the Nasdaq fell through in January. It had also been negotiating a sale to Sam Bankman-Fried’s FTX before the cryptocurrency exchange, which had said it would invest $US35 million ($51 million) in the company early last year, collapsed in November.

PlayUp chief executive Daniel Simic. 

However, PlayUp may now abandon the US market after it received approaches from a US-listed business to buy those operations, people familiar with the company said.

In November 2020, PlayUp raised $25 million to expand into the US, seeking to capitalise on the deregulation of gambling on sports. But attempts to list on US exchanges have failed, and the $US35 million convertible note from FTX complicated other attempts at getting financing, the people said.

Sources told The Australian Financial Review that PlayUp was hoping to raise $10 million via a trust called BetClub, which will take security of PlayUp while it attempts to untangle itself from the collapse of FTX and the convertible note. The transaction is being run by Sydney-based Evolution Capital, and PlayUp presented to investors last week.

“The capital raise is because we need going concern of 12 months,” PlayUp chief executive Daniel Simic said in response to questions. “[The raise] is being done via BetClub because we are unable to raise capital directly through PlayUp whilst the FTX convertible note issue is not resolved.”

PlayUp cannot raise more than $10 million because that would trigger a clause in the FTX note that would