New app launched
Eccles ‘making amends’ for tech’s damage on relationships
Lesley Eccles: fighting legal battle (pic: Terry Murden)
Fanduel co-founder Lesley Eccles has formally launched her new product, a relationship training app that is based on the “damage” that technology has caused on personal relationships.
Relish allows users to get relationship advice from a personal “trainer'” and has attracted thousands of subscribers since a soft launch in app stores a few months ago.
California-based Trinity Ventures, which led a $2.2 million investment round in the venture alongside Bullpen Capital previously backed Starbucks in its early days.
Mrs Eccles who launched Fanduel in 2009 with husband Nigel and two friends from Edinburgh university, describes the new venture as a form of penance for the impact of tech on personal relationships, including a gaming frenzy on the Fanduel site that led to addictions and legal suits.
“I’m doing my part to make amends,” she told New York publisher Crains.
She is also nursing the unhappy outcome of the Fanduel ‘gamble’ which left the co-founders of the fantasy sports business without any financial reward when it was acquired last year.
FanDuel had moved its headquarters from Edinburgh to New York and its backers included leveraged-buyout firm KKR, which had recently launched a fund backing tech startups. Shamrock Capital, the Disney family’s investment arm, also chipped in.
In July 2015 KKR, Google Capital, Time Warner Investments and several NFL and NBA team owners invested a further $275 million into FanDuel, which dominated the sector with big rival DraftKings. Both companies spent millions on television advertising.
But in late 2015 New York’s then attorney general Eric Schneiderman signalled a change of mood in what became a highly-charged legal battle over claims that the companies were in breach of US gambling laws.
After a long and costly fight in the courts the state, along with several others, officially ratified daily fantasy sports as a legal form of gambling.
FanDuel and DraftKings subsequently sought a merger, but the deal was aborted after the Federal Trade Commission indicated it would block what it saw as a concentration of power in a single company. At the time FanDuel had 1.3 million active customers, but while Eccles says its income rose to $124 million, the company lost nearly $40 million and had negative working capital.
In July 2018 FanDuel was acquired by Irish bookmaker Paddy Power Betfair for $465 million all-shares deal which the co-founders claimed undervalued the company by more than half.
Because the sale price fell short of the enterprise value of $559m owed to preference shareholders, there was no money left for ordinary shareholders, including the co-founders Eccles. A lawsuit has been filed claiming they were cheated out of $120m.