7GC II Co-Leads Lucra’s NEW ROUND
7GC Invests in Lucra, Partner Chris Joins the board
We’re thrilled to announce that 7GC is co-leading Lucra’s new preferred financing round with our partner Chris Walsh, who is joining as a board member.
Lucra is revolutionizing the facilitation of social gaming by partnering with a broad array of enterprise businesses across the country, including Dave & Busters, TouchTunes, Five Iron Golf, TennisOne, RPM Raceway, and Sinclair Broadcasting Group.
Competitive wagering can often be a problematic subvertical to navigate. While it continues to become clearer each new year across the regulatory stratosphere, wagering between two counterparties facilitated by technology tends to still have a negative connotation. This has been exacerbated over the last decade with headlines from use cases like fantasy sports, sports betting, and even online lottery platforms.
However, what continues to be impervious to this stigma is the idea of “skill-based” competition between two friends — “the winner of our hoops game buys the next round of drinks at dinner.”
Given the everyday and random nature of these types of social interactions, there has never been a transparent platform to facilitate the process. These “competitions” are settled through Venmo, Zelle, Paypal, or other payment processing channels. These channels do not keep score or tabs on why or what you received that payment for. There is also no ledger of the event for the underlying sport, facility, or establishment where that event took place.
Given the “many-use-case” complexity, sourcing individual users for a wide range of different wagers has been impossible. Lucra has cleverly solved this problem by revolutionizing the go-to-market approach with enterprises across a wide array of verticals, and 7GC couldn’t be more excited to partner with them as they prove this path out further.
The Problem
Unlike other startups within social gaming, the broken, tenuous, and costly B2C user acquisition strategy is side-stepped by the team at Lucra. The company speaks to enterprises directly and provides a product integrated into a customer’s pre-existing mobile application to power friendly competition.
The initial problem Lucra is solving lies with their enterprise customers themselves and the challenging framework associated with user adoption and engagement among their millions of end users.
Companies need more engagement and friendly user interfaces to drive monetization through online channels. With a lack of engagement in these mobile applications, the app remains dormant on a consumer’s phone. For example, the mobile app for your gym membership is used to check into your gym, and then it is exited, with your attention being transferred elsewhere. Not only does this restrain connectivity with many companies’ user base, but it also restricts many corporations from effectively offering real subscription plans, sponsorships, or advertising revenue in any shape, way, or form.
Enter Lucra
Lucra solves all of this. The company has built a white-label business-to-business (B2B) product offering that allows consumer corporations to gamify their offerings. The lightweight offering allows Lucra to quickly integrate their internal risk management, compliance, legal, and payments software - that they have spent the last five years building - with their customers.
The product enables users to challenge each other on things they watch and play for cash or cash alternatives (in-app purchases). This technology powers corporations to organically create cross-sell and engagement with their end users by offering the first-ever recreational wagering software development kit (SDK).
Like sports, the offering enhances community engagement by optimizing existing user traffic on pre-existing apps for brands. According to research reviewed by 7GC, users, on average, spend 1.6x more in apps if they are competing for a prize and 25% longer onsite if they are wagering.
Many of their customers today have millions of recreational players and users but need more infrastructure or the engineering talent to build a comparable bespoke product internally. The white-label offering enables Lucra to run a faster development and sales cycle in a couple of months. These enterprise deals are structured with economics analogous to standard SaaS recurring revenue pricing and at materially lower cost to internal budgets for “home-grown” solutions.
When 7GC met with the company in the second half of 2023, management had a clear strategy but lacked a clear repetitive and defined sales cycle. When we connected with the team two quarters later in 2024, the company had successfully executed bringing in multiple 7-figure licensing deals and proved a highly repetitive and effective sales cycle strategy. Their publicly announced partnership with Dave and Busters alone became the #2 trending story on Twitter in April and was covered by 250 news outlets.
Look forward to partnering with Dylan, Michael, and the entire Lucra team. We’re also excited to join existing partners Steve Kuhn, Raptor Group, SeventySix Capital, Marc Lasry, and Dennis Wong on this journey.