In November, 7GC closed its second investment in fund II, participating in an oversubscribed $120 million Series D funding round in Jackpocket, the first online digital experience for lottery sales. The round was led by Left Lane Capital, a NYC-based growth equity firm born out of previous team members at Insight Partners. Additional investors included Mark Cuban, Kevin Hart, CircleK, and existing partners Greenspring Associates, The Raine Group, Anchor Capital, Gaingels, Conductive Ventures, BlueRun Ventures, and Digital Currency Group.
On the investment opportunity, Left Lane Capital stated:
“The mobile gaming and lottery industry is experiencing an exciting and unprecedented level of growth and expansion. It was very clear to us that Jackpocket was the company in the space to back, and is spearheading real progress and innovation in this market. To innovate in the lottery space in a compliant fashion has historically been difficult, and we were compelled by the integrity with which Jackpocket has navigated the ecosystem.”
Founded in 2013, Jackpocket is a New York-based digital consumer application that provides the leading“online” experience for “offline” lottery sales. The company has developed its own proprietary technology and compliance platform that transforms paper lottery tickets into a digital experience at scale. Since founding, the company has processed over $55 million in lottery ticket sales and +111 million games.
The company’s technology purchases the lottery ticket on a player’s behalf, using software that it built from the ground-up that “scans” each ticket that the player orders. Players can see the ticket, which is watermarked by Jackpocket to keep it unique and authentic. Like all real-money iGaming services, the company has created standards that allow it to comply with different regulations around age, geographical location including GPS technology to identify users’ locations, and VPN detection.
With operations in10 states, including New York, New Jersey, and Texas, Jackpocket's user base continues to grow as it has become a premier brand in large markets, with over two million registered users on the platform and over 300K monthly active users (MAUs). Since raising its Series C investment in Q1 2021, active users have increased over 300%. The latest round brings total funding for the company to $200M and will allow the company to focus on 1) aggressive expansion, 2) new partnerships, and 3) a true diversified product offering.
The funding comes amidst two major catalysts in the iGaming vertical: a) the proliferation and proven success across real-time gambling platforms like FanDuel and Draftkings and b) broader acceptance of digitalization across all demographics as a result of social-distance behavior adopted during the COVID-19 pandemic. With only 7% of lottery tickets being purchased digitally today, 7GC believes we are in early innings for the company and team and are thrilled to be a partner of the company in its next large leg of growth.
In the company press release, Peter Sullivan, Founder & CEO of Jackpocket, added:
“Our success over the past 12 months highlights our ability to reach the broadest base of lottery player possible, and we’ll use this funding to continue to grow and innovate the platform with new types of gameplay.”
Deal Related Press:
TechCrunch: Jackpocket Raises $120M to Expand its Lottery App into Mobile Gaming
PR Newswire: LotteryApp Jackpocket Raises $120M Series D Funding To Lead Future of Mobile Gaming
Company Announcement: Announcing Our$120M Series D