Amit Lakhani is the Investment Director at Zeal Ventures, which has already backed several lottery ventures with early success.
Zeal Ventures is one of the biggest players in the sector, with a track record of investing in new businesses with an innovative take on lotteries.
It is looking for new deals to pursue, for entrepreneurs with smart ideas who are keen to challenge the usual lottery trade assumptions.
Simon English of the London Evening Standard sat down with Amit to find out what Zeal looks for in an investment.
Obvious question, it is all about the prizes, right?
Ha, obviously that is the biggest element, but we want to keep it broad, to expand on that idea.
People spending small sums on a regular basis with the chance of winning a big prize.
But prize gaming isn’t just about the actual winning, we’re selling a dream. If you spend £2 to win a holiday, you can start creating that holiday in your head and work towards it. If you spend £2 on the national lottery, you dream of what your life would be like, and it may provide direction for what you should do in the now.
There are content and marketing opportunities there which go far beyond prizes. We want customers to engage, to find the lottery part of the fun, but not the only part of what they get from us.
What’s the most important thing apart from the prizes?
Data – Zeal is a data driven investor. I’m a data guy at heart. But this doesn’t have to be major – at least in the early stages. We have invested in businesses with just 100 customers.
We want to know, what do those customers do? Do they use the product regularly or do they just try once and never come back? Since we look at small amounts of spend on a regular basis, the repeat usage is key for this business model.
We would rather make £1 over 90 separate occasions, than £90 once from someone we never see again.
But if you’re not yet there with real customers, or large amounts of them. Don’t worry. Find a niche and tell me about that niche. Is there a magazine focused on that niche that the true believers buy regularly? How much do the people in this niche spend? Do they have disposable income? What indicators are there that they would use your product? Those are the things we want to know. We don’t need to be all things to all people on day one, an impossible idea anyway.
Teams are the most important part. We actively try to limit the hard power we have as an investor. Yes, we want influence. No, we don’t have all the answers. That’s why the team is so vital. We are betting on the people in the business to make the right decisions when the time comes. We will help, we will advise, but the decisions will be with the team, your team.
Take some time to think about who you’re going on this entrepreneurial journey with – what skills do you need for success? We are test and learn fans so keeping an open mind gets you a long way as far as we are concerned.
Describe a perfect or at least very good deal for Zeal.
Some clever folk with a neat idea, one we haven’t heard before, or that is a great twist on an existing idea. Ideally with the “get up and go” attitude and some data to show for it. We love to see those early customers ideally with pretty strong marketing payback periods of 3-6 months.
And a plan that is plainly open to expansion but which isn’t obviously over the top. Ambitious but achievable. A business that has taken the time to look into us and figure out if we are good partners.
Where have you already invested?
A few are:
1) PickMyPostcode.com – the world’s biggest free-to-play ad-funded daily raffle. Run by a solid guy who started by giving away just £5 a day which has built up to nearly £1,000 a day. It has more than two million members and we think it can get much bigger.
2) Omaze.com – their unique connections helped launch competitions in the US giving users the chance to win amazing experiences with their favourite celebrities, for instance going on a double date with Nicole Scherzinger and Thom Evans.
3) The team at Odurn.com came to us with a completely different business model at the time with solid repeat purchase rates and have now shifted to luxury fashion raffles. There is cash, handbags and much else to be won.
4) Racehorselotto.com – the first ever prize competition in the UK offering players the chance to win unbelievable racehorse experiences including the chance to own your very own racehorse.
5) Daymade.co.uk – this is a millennial focused prize competition. It is all about experiences and travel, especially for younger women that tend to be ignored by much of the lotto trade.
How should people approach you?
Drop me a line at email@example.com. Tell your story on one page of A4. We will be in touch.
Thanks Amit. Last question, the franchise to run the National Lottery is again up for grabs, with a decision due at the end of the summer. The top two seem to be incumbent Camelot and Czech firm Sazka. Who is going to win?
I don’t know. But if I were a betting man, my money would be on Sazka…