Sports-focused prediction market Novig secures $75 million to take on Kalshi and Polymarket
As prediction markets Kalshi and Polymarket capture the focus of investors and regulators, sports-focused rival Novig is revealing $75 million in new funding to take on the two industry leaders. Led by the blockchain venture firm , Novig’s Series B round values the startup at $500 million.
Once a heavily restricted activity, sports betting has in recent years spread to every nook of the U.S. economy. First came a 2018 Supreme Court that cleared the way for states to legalize wagering on leagues such as football, basketball, and baseball. Then, a by Kalshi expanded the range of contracts prediction markets could offer, prompting platforms to move past bets on weather and award show outcomes into fields like elections and sports.
Today, the bulk of Kalshi’s trading volume comes from sports contracts—even as some state governments aim to restrict or shut down sports-based prediction markets. Novig, though, is paying less attention to legal dimensions and making a different case about sports betting: that existing options exploit their users.
“We founded the company because we believed sports betting was flawed,” cofounder Jacob Fortinsky told . “Our mission from day one was to build a platform truly designed for modern sports bettors in the most consumer-friendly, engaging, and profitable way possible.”
Gambling on the future
Fortinsky began developing Novig in 2021 during his senior year at Harvard alongside cofounder Kelechi Ukah, joining the tech incubator Y Combinator the following year. During this time, however, the regulatory outlook for prediction markets was uncertain at best. (Polymarket would be banned from the U.S. in 2022 for offering unlicensed betting.)
Novig initially registered as a regulated sports betting operator in Colorado before shifting to a sweepstakes model. Still, neither approach allowed Novig to operate nationally, and the latter led to legal challenges from state regulators. Now, Novig is applying to operate under the Commodity Futures Trading Commission, which Fortinsky hopes will be completed within six months.
His argument for why Novig’s prediction market is superior to traditional sportsbooks like FanDuel is straightforward: Because Novig is peer-to-peer, users aren’t trading against the house, and theoretically get better odds. Why Novig is better than Kalshi (which boasts significantly more volume) is less clear, but Novig makes the case that the platform’s fees are prohibitively expensive.
Novig, in contrast, is commission-free for retail traders—hence its name, a play on the term “vig,” or the rake that sportsbooks take. Instead, the platform charges fees to institutional participants. That means users often bet against so-called “smart money,” though Fortinsky says a (still-depressing) 20% of Novig bettors are likely to be profitable, a rate he claims is much higher than other platforms.
On a more fundamental level, Fortinsky says Novig was built for sports, as opposed to Kalshi and Polymarket, which originally emphasized other types of contracts. “Our basic bet as a company is that the median sports fan is far more likely to use an app whose brand and product are truly built with sports in mind, rather than with crypto or ,” Fortinsky said.
Whether the proliferation of sports betting through prediction markets is healthy for sports fans is a separate question. While critics—and states—have argued that prediction markets are just another form of gambling, Fortinsky pushed back. “Ultimately financial trading and betting are sort of converging,” he said. “In a colloquial sense, we certainly don’t view what we’re doing as gambling.”
Though the distinction may seem thin, even CFTC chair Michael Selig seems to agree, arguing in a Wall Street Journal last weekend that event-contract markets squarely fit under the remit of his agency and “serve legitimate economic functions.”
For Fortinsky, sports betting is just part of the fandom experience, despite the blurred ethical lines regarding . “For many sports fans, it deepens their engagement, enjoyment, and fan experience,” he said. “A lot of the frustration with sports betting is that it’s a commoditized product dominated by casinos trying to maximize profits at sports fans’ expense.”