Earlier this 12 months, Lucra Sports founder and CEO Dylan Robbins did one thing that nobody else has ever finished.
He landed famed public investor Cathie Wooden and her ARK Make investments Enterprise Fund as a lead in a startup fundraising spherical.
Lucra introduced final month that it raised a $20 million Series B, led by the ARK fund, with participation from a number of different VCs. Robbins attracted ARK regardless that the fund had beforehand gotten badly burned on an identical eSports firm: Skillz, a skill-based gaming platform wherein the fund invested heavily before divesting at a loss.
On high of that, Dylan landed this large fish as an investor regardless that his firm is just not within the one space that each one VCs are at the moment chasing: AI.
Lucra provides white-label interactive gaming competitions as a novel type of loyalty program for companies that serve shoppers. Moderately than, say, incomes factors towards a coupon, Lucra’s shoppers supply on-line tournaments for prizes, or helps pleasant wagers between their prospects on who will win video games. Its prospects embody 5 Iron Golf, Dave & Buster’s, and Chess King.
Robbins instructed us there have been two secrets and techniques in how he landed a big-name investor in opposition to such odds:
1. Be pleasant to everybody, wherever since you by no means know when an off-the-cuff dialog will flip into your main investor.
2. Lead your pitch with AI even in the event you aren’t a famed AI scientist and aren’t constructing fashions, brokers, or something AI.
To the primary level, the seeds to Lucra’s fundraising journey started when Robbins was enjoying darts in a New York bar. He met one other man on the dartboard, they usually loved a couple of video games collectively.
“Six months later, we bumped into one another on the bar once more. The identical darts bar. It’s like, ‘Good to see you. How’s it going?’ And we obtained to speaking and I requested him what he did for work. And he instructed me he labored at ARK,” Robbins recalled.
Robbins instructed him about Lucra and the contact launched him to the funding group at ARK, which wound up writing a small verify in his Collection A spherical.
“My first piece of recommendation on all of this is you by no means know who you’re speaking to. Simply go round, be good, meet folks, have enjoyable,” Robbins says. Let that result in good conversations, which can result in introductions, he mentioned.
Flash ahead a couple of years to the top of 2025, when AI had overtaken enterprise funding like honeysuckle.
Lucra Sports activities had actually discovered its lane with its white-labeling service. It was prepared to boost a Collection B to gas progress and new concepts like including mini-games into its choices. (Lucra simply invested in a mini-game growth accomplice to construct out this functionality.)
However Robbins saved working into an AI-shaped wall.
“We have been elevating in This autumn of 2025, which was then, like even now, type of peak AI mayhem,” Robbins mentioned. “One out of each three calls, the primary line, they’d cease the assembly and say, oh, we’re solely investing in AI now, I don’t wish to waste your time. To the purpose the place they wouldn’t even let me pitch.”
The remainder instructed him they have been solely investing in AI after they heard the pitch.
So Robbins tried a brand new tactic. He adjusted his pitch and his deck to debate AI proper out of the gate. The revised pitch argued that if AI works, individuals are going to have extra free time to play video games with pals on the bar or on-line — therefore his enterprise will probably be a winner — and if it doesn’t, a non-AI wager begins to appear to be good diversification. It was a hedge both means.
“It was a small cohort of folks that would actually take it significantly,” he mentioned of his pitch. ARK, happily, was one in all them. As soon as dedicated, the lead investor made introductions to different VCs to assist fill out the spherical.
Underpinning all of this have been good enterprise fundamentals, together with “constant 12 months over 12 months progress, not only one spurt,” he mentioned.
The ultimate lesson Robbins realized was that, particularly for a non-AI enterprise, VCs wish to hear an enormous dream. Robbins had one: a complete addressable market of anybody who performs video games of any type, from pickleball to Wordle.
“So our TAM is virtually each American that’s 18 to 70, proper?” Robbins mentioned. Even so, he had one VC ship a rejection that he printed out and posted to the wall.
“I despatched them our progress chart and our TAM, which was like loopy, up into the best progress potential, enormous, large, billions of TAM. And the response was: ‘TAM’s too small.’ That was the response. Like, our progress charge was too gradual,” he mentioned.
He mentioned this was a “reminder” to him “to suppose even greater.”
“I’ve to place myself in that mindset and actually swing for the fences if I wish to increase enterprise capital cash,” he added.
While you buy by means of hyperlinks in our articles, we may earn a small commission. This doesn’t have an effect on our editorial independence.
