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Read Full BioNovig closed an $18 million Series A funding round led by Forerunner Ventures on August 11, and now claims to be the ‘number one sports prediction market in the US’.
In addition to Forerunner, existing investors Y Combinator, NFX, Perceptive Ventures, and Gaingels all participated in the funding round. Founded by Jacob Fortinsky and Kelechi Ukah, the prediction market platform has surpassed $2 billion in trading since going public in September 2024.
Fortinsky, who is also the company’s CEO, commented on the successful funding round in a press release, stating, “What we’re building isn’t just sports predictions–it’s a true peer-to-peer market.”
“We believe users deserve a system that rewards skill, reflects true supply and demand, and gives every fan a fair shot. We’ve quickly become the #1 sports prediction market in the US, and our organic growth speaks to the strength of our product and the passion of our community.
“The support from some of the world’s leading tech investors, who believe in our mission to democratize sports betting for good, is a powerful endorsement—not just of what we’ve built, but of the future we’re creating. This funding will allow us to scale our mission across more sports, more formats, and ultimately, to more users.”
Investors Back Platform Amid Legal Scrutiny
Novig differs from other prediction market platforms as it allows users to trade using ‘Novig Cash’ in a sweepstakes model. It therefore does not hold any valid sports betting licenses, and it is also not licensed by the Commodity Futures Trading Commission (CFTC) like other operators such as Kalshi and Polymarket, which recently acquired the CFTC-licensed platform QCEX.
The sweepstakes model has faced increasing legal challenges, with several states explicitly banning sweepstakes casinos this year. A new report published by the American Gaming Association (AGA) found that the majority of players believe that sweepstakes casinos are a form of gambling.
When it comes to prediction markets, there remains debate about whether users trading on the outcome of events constitutes gambling. In Colorado, Novig briefly operated as a licensed exchange in early 2023, but eventually exited due to regulatory hurdles and pivoted to the sweepstakes model.
The company is now operating in two gray areas, with both sweepstakes and prediction markets facing opposition from state regulators. Novig was one of the platforms targeted by a regulatory crackdown on sweepstakes in Arizona last month, with the state’s gaming regulator issuing the company with a cease-and-desist letter.
But the lack of clarity over the legality of the platform has not dissuaded investors. Fawzi Itani, Principal at Forerunner, instead sees the unique model as a strength, commenting, “Novig sits at the center of several key secular trends in gaming and entertainment, namely that consumers increasingly are spending their time, energy, and attention with financial products.”
He added, “The Novig team brings the most sophisticated and nuanced perspective to sports prediction markets. They not only deeply understand their target customer, but are building a system that is more fair, community-oriented, rewarding, and well, fun.”
Funds to Fuel Expansion of Sports Markets
The company stated that it will use the injection of capital, “to expand coverage to additional sports and deepen its presence in existing markets.
“The company will also launch new features, including leaderboards, group contests, and head-to-head trading. Additionally, Novig aims to support fiat on-ramps such as debit and credit card payments, launch a full-featured web app, and scale hiring across its engineering, product, and growth teams.”
As part of the expansion, Novig is expected to offer parlays, in addition to the moneylines, prop bets, and overs/unders, which are already available. This is a wider choice of markets than other prediction market platforms, with Kalshi so far limiting its offerings to moneylines.
As prediction markets grow in popularity, rival platforms are also expected to enter the market. Railbird, which is licensed by the CFTC, is poised to launch and has been in talks with DraftKings over a possible partnership. Polymarket, which has officially not operated in the US in the last three years, is also set to re-enter the market through QCEX.
A recent CFTC ruling has made it easier for Railbord and QCEX to launch their platforms, with the regulator declaring it will not take any action on certain rules around swap reporting and recordkeeping.
Investors also backed Polymarket recently with a $200 million round of funding that takes its valuation up to $1 billion, while Kalshi completed a Series C funding round that put its value at $2 billion. Novig did not divulge any valuation figures after its round of funding.
