What does it take to build a $2 billion consumer Internet company in the UK? For starters, center it around a market that's illegal in the US.�Betfair, a marketplace that matches and executes some five million wagers everyday, went public earlier this year and is valued at more than $2 billion.
It has a few things in common with the other $2 billion-plus Internet win out of Europe, Skype. While Skype's business wasn't illegal in the US, it was tricky for its founders Niklas Zennstrom and Janus Friis to travel here after the exploits of its illegal filesharing company Kazaa. There's another similarity: Both Betfair and Skype utterly failed to raise venture capital in the early days. In the case of Skype, investors like Bessemer Ventures, Draper Fisher Jurvetson and Index certainly wised up quickly. In the case of Betfair, 5 million pounds from friends and family was the only venture investment the company ever took-- or ever needed.
Betfair's CEO David Yu was in Silicon Valley for the Web 2.0 conference, and he stopped by our studio to talk about the recent IPO, and the newly launched spin off of Betfair, LMAX, which uses the same technology to run a financial trading business. That same technology already handles more "trades" in terms of wagers than all European stock exchanges combined, with�99.9% of them completed in under one second. We also talked about the company's plans for Silicon Valley and the United States.�
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