Sharp Alpha has raised $150 million in non-dilutive capital to fund user acquisition for sports, gaming and entertainment companies.
The Sharp Alpha UA fund will be deployed to help companies get new users over the next 24 months. The UA fund will target investments of $4 million to $30 million, with interest in larger facilities once a relationship has been established.
Sharp Alpha’s managing partner Lloyd Danzig is being joined by a team of veterans with backgrounds in revenue-based financing, structured products and quantitative finance.
Danzig said in a statement that online gaming and interactive entertainment businesses are prime candidates for this type of financing.
“Unlike traditional equity or venture debut, cohort-based financing aligns capital deployment directly with customer acquisition outcomes. This structure preserves ownership, avoids restrictive covenants and scales with company growth,” Danzig said.
Companies that are profitable or near break-even in the $10 million to $100 million revenue range are looking to cohort-based financing as a supplement or replacement for traditional funding because it offers “a much more economical and long-term advantageous source of capital to companies with favorable payback periods and strong retention,” Danzig said.
In addition to non-dilutive financing, Sharp Alpha provides portfolio companies with a comprehensive suite of strategic resources and opportunities spanning software development, brand partnerships, regulatory consulting, proprietary benchmarking and product launch acceleration.
Commenting on raising the firm’s third fund amid a challenging backdrop, Danzig said, “We were blown away by the amount of demand from our existing limited partners for this product. Investors seeking venture-like returns have been largely disappointed by actual distributions over the last five years.”
The Sharp Alpha fund considers a wide range of consumer-facing opportunities but concentrates predominantly on online gaming, prediction markets, sports media ecommerce, health and wellness and interactive entertainment.
Existing Sharp Alpha equity investments from prior funds include Triumph Arcade, Courtyard.io, Poolhouse and Jackpot.com.