Hoping to win contracts in 15 U.S. states as well as Greece and launch an Internet product in the next year, Sydney-based gaming machine maker Techlink Entertainment is on a quest to raise $30 million in venture capital financing by the end of March.
CEO John Xidos said in an interview this week the company is now courting U.S. venture capital firms and expects little difficulty in raising the money, given Techlink’s prospects.
“We’re going to raise more with this new internet project – we’re going to raise about $30 million,” he said.
If the company reaches its target, it will be the largest VC fundraising in the region since Unique Solutions of Dartmouth secured $30 million from Northwater Capital Management Inc.'s Intellectual Property Fund in July 2011. Xido said the company in the past raised $40 million from 200 Nova Scotian investors. Nova Scotia Business Inc. has extended Techlink $13 million in funding.
The company has recently announced agreements to provide video lottery terminals in the states of Ohio and South Dakota. Techlink’s specialty is producing VLT games that accept prepaid cards rather than cash so patrons are alerted when they have spent a certain amount. Such machines are mandated in Nova Scotia under the province’s responsible gambling rules.
Xidos said the success in those two states is only the beginning of its U.S. expansion. Techlink expects to have similar agreements in a total of 15 U.S. states by the end of 2013 as more states allow VLTs in bars, hotels and the like rather than restricting them to casinos.
The market that really excites him is Greece, which is in the process of privatizing the state’s 34 percent stake in the company OPAP, which literally translates as the Greek Organization of Football Prognostics. The public company manages lottery and sports betting in Greece, and is Europe’s largest betting company.
Once the privatization is completed, OPAP and private operators will tender for a total of 35,000 new VLT terminals, and Xidos said the contract will require similar responsible gaming restrictions that are in place in Nova Scotia. He believes the contract will be worth about $120 million.
One other aspect of the company’s growth is that it is planning to launch an internet product next year that will be “the Facebook of the gaming industry.” Xidos said that he would not reveal details on the new product until the new year.
Techlink now employs about 100 people, mainly in Sydney, and Xidos said the contracts outside Nova Scotia and the internet product will drive a lot of new hiring. Techlink is also expanding its board and will soon name two U.S. directors, one with experience in startups and the other in gaming.