Betable secures $3 million to become the Twitter for betting

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Betable, where users can literally place a bet on anything and have their friends bet with them, has secured a $3 million first time funding led by Atomico, the venture fund set up by former Skype founders Niklas Zennström and Janus Friis. Former Skype chief strategy officer Geoffrey Prentice joins the board. It’s an unusual move for a VC house to back what is in effect a gambling site, but Betable is presumably in the ‘social’ space sufficiently enough for Atomico to feel comfortable with the investment.

While the site is built almost entirely in the US, the CEO and founder Christopher Griffin based and launched the company in the UK where gambling laws are more more conducive to gaming sites than the US. It will compete to some extent with another UK-based social betting site founded by Americans, Smarkets, but where the latter is more for regular gamblers, Betable is designed to be a more casual “Twitter for Betting”. Griffin hopes the site will attract the normal bets made between office workers or between university students (betters have to be over 18).

Betable’s business model is based on taking 10% of the profits on bets. Users get 30% of the proceeds of a bet they’ve created so there is a big incentive to create bets. The service gathers money from all participants upfront, so it can guarantee that the winners get paid. You can deposit cash in an account via credit card, Moneybookers or NETeller. US players can create a profile but are blocked from actually betting because of the anti-gaming laws there.

It’s easy to see Betable falling between the social games of the likes of Zynga and the hard-core betting on Betfair. There is a clear space between the two which Betable is aiming at.

With Betable being aimed at such a casual market, they are also looking at creating smartphone apps for iPhone and Android where people can literally wager each-other on the go.

There is a litany of sites that have tried and failed to crack “social betting” including Pikum, which shuttered, and Bragster, which dumped betting for a media model before being sold off.

But the social aspect of Betable is, by contrast, it’s strongest suit. It appears to be the the first betting site able to connect with Facebook, which is a big move. The site also connects with Twitter, but then doesn’t everyone these days. That means you don’t need to rebuild your social graph. It also means your mum will know about that bet you placed with your co-worker – if you’re not careful.

How will Betable prevent scamming and personal frauds? The idea is that because it’s inherently social, people you know will call you out if you start scamming them with bets you know you can win (e.g. I bet I can drink 5 coffees in 10 minutes etc). Admitedddly, users could gather a group of people who were “in” on the same, but Griffin told me that Betable is very confident of its reputation system. They have to do a lot of ID checks, so bank accounts are tied to addresses, and tied to one ID on the site. And the publicly available “satisfaction rating” on each profile will potetnialy warn people off joining a bet created by a someone who continually cheats others. So you’d need to be a sophisticated, repeat fraudster to get around the system – at least that’s what they say.

Griffin has a pretty experienced team which includes former Microsoft software developer Amit Kumar and former Friendster engineering VP Jeff Winner. In a visit to TechCrunch Europe, we had Griffin create a bet on whether Nokia will dump its CEO. Here’s mine on Facebook hitting 600m users inside the next three months.

Betable is the first company selected for Atomico Ventures II fund.

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