Social betting firm Dabble considering stockmarket listing; targeting $500m revenue in three years

The fast-growing business, part-owned by Tabcorp and Estonian-based billionaire Tim Heath, says it is now profitable and has big expansion plans in several overseas markets.

Dabble is giving away $1m to attendees of the Australian PGA golf tournament in November if there is a hole in one.

Fast-growing social betting business Dabble is exploring a stockmarket listing, potentially on the NASDAQ in the US, as it targets a quadrupling of its revenue by 2027.

The company, part-owned by Tabcorp and investors including billionaire Tim Heath, has also outlined big expansion plans in the UK and US and then markets like Brazil and Canada in a shareholder document obtained by The Australian.

“We are currently exploring possible IPO pathways with both Australian and US advisers, and the early feedback is that Dabble could make for a promising IPO prospect,” Dabble’s management said in the document.

“The NASDAQ is the most natural exchange for Dabble to consider, being the home of a large portion of global, high-growth consumer technology businesses like us.

“The ASX is also being considered … (and) if this was to occur, we expect it would be most likely to happen in an 18 – 36 month time horizon.”

Billionaire Tim Heath is a Dabble shareholder and director.

Dabble is just about the only Australian bookmarker growing in what is a tough market hit by a drop in consumption spending and rising taxes on the wagering industry.

It was valued at about $165m when Tabcorp acquired a 20 per cent stake for $33m in 2022, a transaction first revealed by The Australian.

That deal was struck at about roughly three times Dabble’s revenue, which has since grown from an annualised $47m in June 2022 to $117m for the 2024 financial year.

Dabble management said it now has about 2 per cent of the Australian wagering market and projected its revenue to hit $500m within three years.

“At the top line, we are expecting our FY24 revenue figure of $117m to increase to (more than) $200m in FY25, and to grow by at least another 50 per cent in each of FY26 and FY27, leading to FY27 Revenue of $500m-plus as our base case,” its document sent to shareholders said.

Dabble revealed it made an earnings before interest and tax, depreciation and amortisation (EBITDA) loss of about $9m for the year to June 30, but more recently been profitable.

Over the six months to August 2024, “Dabble produced a combined >$10m EBITDA across Australia and US,” management told shareholders.

Dabble is run by CEO Tom Rundle.

“We consider that the underlying Dabble business has reached sustainable profitability, and that loss-making periods will only occur when discretion is used to invest in disproportionate value creation opportunities.”

Dabble said it was considering several options for shareholder liquidity, including an IPO and the ability for shareholders to sell or transfer shares privately.

Any move to sell the business was likely “best explored in 3-plus years to maximise the value of the opportunities that we have in front of us”, though Dabble admitted it was “an attractive acquisition target to a relatively large pool of potential suitors”.

Regarding its Australian market share, Dabble forecast it would more than double in the same period and was targeting the same number in America where it has established a fantasy sports business.

“We expect that number to be 5 per cent-plus by FY27. While advertising reform is likely in Australia, our view is that recreational punters will continue to seek betting as a form of entertainment, and that the best product will win in the end. Dabble is well placed to be resilient to any changes.”

Management added they “see no reason why our 5 per cent Australian target is not also achievable in the US in the medium-term horizon.”

Dabble combines wagering offerings with social functions seen on Twitter and WhatsApp, and gives customers the ability to copy bets placed by friends or others they follow.

Tabcorp, headed by CEO Gillon McLachlan, is a Dabble shareholder

It is particularly popular among younger punters, with most of its customers aged between 18 and 35. It is giving away $1m to attendees of the Australian PGA golf tournament in November if there is a hole in one.

“Dabble has firmly established its market position as a fun, community-oriented, and entertainment-first wagering brand,” the shareholder document says.

“Our research suggests that a large majority of punters view betting as a form of entertainment rather than a financial endeavour. It is seen as more comparable to spending money on a movie ticket or a beer at the pub than investing on the stock exchange. We are doubling down on this position.”

The company was founded in late 2020 by Albury-based brothers Jonathan and David Robin, and is run by chief executive Tom Rundle, a former PointsBet chief operating officer, with offices in Melbourne and Austin, Texas.

It has more than 850,000 registered users in the US and claims to currently be the highest rated betting app on both the Google Play Store and Apple App Store in Australia, ahead of the likes of Sportsbet, TAB, Ladbrokes, Bet365 and PointsBet.

Dabble said its US presence cost it at most about $500,000 to establish, was “really just scratching the surface” and is a market where there was plenty of potential for growth given it is currently operating in 25 states.

It will next target the UK — “We expect to be in a position to launch in the UK sometime in 2025” — and management said “Brazil and Canada are the next most likely and there is a long list of possible options after that.”

Dabble did not comment when approached by The Australian.