Tim Heath is GP of Yolo Investments, a leading technology venture capital firm, and the co-founder of Yolo Group, a company operating leading crypto gaming brands including Bitcasino.io and Sportsbet.io. The latter has secured high-profile sponsorships with the likes of Newcastle United and Southampton FC. Since founding Yolo Investments, the firm has rapidly grown to the point where it now supports more than 70 businesses across five funds, with assets under management of more than $500 million. Tim recently sat down with Pierre Lindh, co-founder of iGaming NEXT, for an in-depth conversation that spanned gaming, investments, AI and more.
Pierre Lindh: What are some of the interesting and major trends in the iGaming industry that you are seeing right now?
Tim Heath: Looking back over the last five years, I was a very strong advocate for how I saw cryptocurrency becoming a significant player in the industry. For me, these are the perfect digital gaming chips.
If we look at 2024 compared to 2017, there have been unbelievably strong winds of change throughout the industry, where people realised just how simple crypto is from both a consumer perspective and a payment service provider’s perspective. It’s amazing how many sites have really excelled in taking crypto. It has shaped where we are at the moment.
As a guess, I’d say 25% to 30% of global iGaming turnover is now crypto, and that’s rapidly accelerated from where we were seven years ago. However, it’s a really important point to recognise that we’ve still got a long way to go in reaching full mass adoption. We need to realise there is not going to be crypto adoption for every single person in the world. But certainly, there’s a lot more people aware of crypto, using crypto and depositing and withdrawing crypto than there were five to seven years ago.
A lot of focus in the industry now is on removing friction and placing simplicity at the heart of streamlining money movement within iGaming. What are your thoughts on that?
I agree that simplicity should be at the heart of all things gaming. For example, sportsbooks know what my bet history is and what my future bets will most likely look like, so why not reduce the friction to make it easy for me to take part. Then I can focus on enjoying the football and have the emotional enjoyment of the football and gaming combined – win, lose or draw.
The emotions that we feel whilst taking part is what drives the entertainment and the satisfaction from sports betting. There will necessarily be some friction in terms of getting the money in and authenticating it and doing KYC – which has to be done in today’s day and age – but why not make that as simple as possible so we can focus our emotions on taking part in the game. That should be something all sportsbooks strive towards.
How do you feel about integrating AI into the iGaming ecosystem at the moment?
It’s really not that complicated. Let’s start off with the basics. For example, sportsbooks should ask themselves ‘what does this player like to bet on and how can we almost prefill their sport bet slip and perhaps push them to that Thursday night 7 p.m. game?’ For example, for me they might say ‘Hey Tim don’t forget we’ve prepared your Arsenal and Newcastle bet for the weekend, good luck!’ Most players do it recreationally and follow certain teams or sports so it’s not that complicated. I think we sometimes get bogged down with AI or get caught up in moonshots, which is important, but it should also get the basics right first of all. For our purposes this means amplifying the customer experience.
AI is simply about understanding player trends and desires and not necessarily trying to change their habitual routines. For example, if someone’s habitually playing a slot, then leave them there! Don’t try to change that. You’re already satisfying their emotions and their endorphins and they’re playing the game they want to, so you don’t need to change their style.
AI should be used to make it easier for the player to find what they actually enjoy, and we’ve all got enough data to work out what that is. Do this and you’ll double GGR [Gross Gaming Revenue] overnight.
How do you generally find investment opportunities that you end up investing in?
At Yolo Group, we’ve got a very specific set of ideas that we believe need to be achieved and we are going out actively searching for things to solve those problems. It’s all about solving problems and addressing gaps in industries. We find that the network of people we’re working with will often come to us and say ‘look one of my friends (or one of my business partners) is doing this and we think it could fit into your ecosystem really well’. Then it’s worth a chat. If it is a trusted contact who is bringing it in, it means it’s almost had that first level of vetting. Now there’s no guarantee it’s going to work or it’s going to be good but we’ll have a good look through it.
What advice do you have to those entrepreneurs or start-ups who don’t already have their foot in the door, to grab the attention of the likes of yourself and Yolo Group?
Ultimately, to be an entrepreneur you have to be a hustler. You’ve got to be able to hustle. You’ve got to be able to sell yourself. You’ve got to be able to network. If you’ve got a product and you want to sell that to the market, you need to be able to get out there and go in front of people and find a way to sell to someone. To find a way in, you need to go and do your research and not expect it to be lined up on a plate. You need to be the one taking the jump. You need to be the one writing on LinkedIn about your concept and your opinion. And you need to be able to push that information through to the right place.
It takes a little bit of thought and a little bit of thinking outside the box but if we’re going to invest into your thesis then prove to me you know this area back to front. Prove to me you are the best you can be. You might not be fully polished or be all the way there but by God you’re giving a good shot! And you are excited, and you’re interested, and you want to learn more, and you want to ask questions, and you want to prove that you understand your niche area as well as possible. That’s what us investors are wanting to see!
It is exciting times of course for Yolo Group with this new fund launching. I want ask you what opportunities will you be looking for in this second fund, Yolo Fund II?
Primarily there’s three main things we’re looking for. One is obviously gaming. We love gaming, we understand gaming and we’ve got fantastic distribution of gaming products. One will be blockchain and I’m making a little bit of distinction there because it’s not just crypto anymore it’s blockchain with the emphasis on B2B rails – on how to transfer value between two untrusted entities. Finally, we are looking at fintech, which is traditional good old fashioned banking, payment processing and how money moves around. The fund is a €100 million fund where I will contribute €50 million, and the other €50 million coming from external investors, which will target high growth companies a little beyond the start-up phase.