#50: Investment Strategies and Identifying Promising Startups

Before I dive into today’s topic, I want to say thank you for tuning in. We’re now at 50 editions of this newsletter. It started as an experiment, but the engagement and feedback have been insane.

We have maintained a 50%+ average open rate, and many of you have been with us since the beginning. I appreciate you! 

And now, let’s dig into today’s topic…

I mentioned in a previous newsletter that, as an investor, I dream of investing in a unicorn (who doesn’t?).

But I’ve watched the iGaming investment scene transform a lot. Gone are the days when you could get substantial returns by financing generic white-label operators with straightforward marketing strategies.

The easy(ish) money has dried up.

Today's market is saturated and sophisticated. The majority of investment pitches I see these days are basically clones. Where’s the innovation?

But within this sea of sameness lie some great opportunities if you tune your attention to them.

I've developed a disciplined framework for identifying good opportunities, and I'd like to share my thoughts on some key areas of this today. 

The Foundation: Investment Criteria and Common Pitfalls

After reviewing hundreds of investment proposals and taking countless founder meetings, I've distilled my approach into three non-negotiable criteria that guide every investment decision I make.

People → Synergy → Upside

First and foremost, I invest in people… 

This might sound cliché, but it's fundamentally true… especially in an industry as relationship-driven as ours. Beyond looking at technical capability, I look for integrity and, crucially, chemistry.

I only invest in teams I genuinely enjoy spending time with. Would I want to share a meal with these founders? Would I embark on a mission with them? If the answer is no, I walk away, regardless of how promising the numbers look.

Second, I evaluate potential synergy… 

My primary value isn't just financial backing; it's my ability to accelerate growth by adding my strategic expertise. Can I leverage my experience in traffic acquisition, analytics, or operational optimisation to create fast, measurable improvements?

If I can't identify specific ways to amplify the business beyond capital injection, it's not the right fit for my portfolio.

Third, I rigorously assess the upside potential… 

Every project must demonstrate a clear path to financial returns and potential exit opportunities.

For strategic investments, the aim is often significant multiples on invested capital, potentially realised through acquisition within a medium-term timeframe (e.g., 2-3 years for certain ventures).

When examining iGaming investment proposals, I've encountered recurring weaknesses that immediately signal danger:

Copycat operators are the most common pitfall. Teams proposing standard white-label platforms with minimal differentiation are competing solely on execution in an oversaturated market.

Without a meaningful competitive advantage, profit margins inevitably compress, and growth stalls.

Another red flag is distressed SEO and affiliate ventures. Many affiliates encounter difficulties following Google's algorithm updates or the declining effectiveness of PPC advertising.

They seek urgent investment for survival rather than expansion, essentially asking investors to catch a falling knife.

I'm also wary of "vertical jumpers". The teams transitioning from fintech or the like, who frequently underestimate the complexity within iGaming.

Identifying High-Value Opportunities

Having established what to avoid, let's focus on where I think some good opportunities are today.

I think a few market opportunities remain under-exploited, and could offer good returns for investors who recognise their potential.

#1: New traffic acquisition channels:

While most operators battle over increasingly expensive ad channels, forward-thinking companies are pioneering alternative approaches.

Telegram communities, Discord channels, niche influencers, and innovative micro-social platforms offer strong alternatives.

For instance, Telegram-based casinos and community-driven show great results as powerful new funnels, showing good user acquisition potential.

#2: SaaS Solutions

Specialised software solutions addressing operational challenges are another key area.

Platforms focused on advanced analytics and data intelligence for affiliates and operators can deliver significant value.

These types of products, often monetised through subscriptions or similar models, can create sustainable revenue streams and align investor success with client growth, building good long-term partnerships.

#3: Geographic targeting

Using data-driven tools like Blask’s market intelligence dashboards, we've uncovered remarkable insights:

Mozambique demonstrated substantial year-over-year GGR growth with minimal competition, marking it as a prime candidate for early affiliate and operator investment.

Few investors even consider this market, creating an asymmetric information advantage for those willing to look beyond conventional territories.

Bangladesh offered another good case. Our analytics identified mid-tier operators experiencing rapid market-share gains, indicating significant traffic acquisition efforts.

This highlighted strategic opportunities for affiliate collaborations in a region many Western investors overlook.

Building a Resilient Investment Strategy

To mitigate these risks while maximising returns, I diversify my investments in several different ways.

Targeting diverse geographic markets is a key part of the strategy, and allows for the capture of opportunities in different types of regions we see in data analysis (such as the examples of Mozambique and Bangladesh).

Asset diversification provides gives another layer of protection. I combine steady revenue streams from SaaS-based solutions with higher-upside, higher-risk ventures like SEO and affiliate ventures.

This approach ensures consistent cash flow while maintaining exposure to potential breakout successes.

It’s also important to know when you’ve made a mistake. There’s a big opportunity cost (and of course, financial) if you don’t. This willingness to acknowledge failure and pivot preserves time and capital for more promising opportunities.

My due diligence process has evolved accordingly, with particular emphasis on:

• Customer acquisition economics (detailed assessment of user acquisition costs versus lifetime revenue)

• Market differentiation (clearly identifying unique advantages competitors cannot easily replicate)

• Operational uplift potential (quantifying areas where my expertise can significantly improve performance)

• Exit strategy (identifying potential acquirers and realistic valuation multiples)

In my view, disciplined investment strategies combined with deep operational knowledge will continue to be the key in the search for the next iGaming unicorn.