CEO Spotlight Series: Exclusive Interview With Manu Gambhir, CEO of Xpoint

Manu, you have quite a history of both founding and operating companies in the gaming space. Can you tell us about what drew you into the gaming industry, your history in the industry, and what led you to your current role? Why did you find Xpoint such a compelling opportunity?

I am very passionate about real money and casual mobile gaming. I have always seen substantial opportunities for innovation in gaming and found it a hotbed for incredible talent. Despite all the progress over the 30 years since I first got involved with online gaming, there is still tremendous headroom for building better experiences that delight end users and produce better unit economics.

The online sportsbook and casino experiences we engage with in the U.S. today are similar to what I saw in the U.K. more than a decade ago. The areas for innovation span from better UX/UI, more content, and deep personalization (especially for VIPs) to modern software engineering that results in lower operating costs and faster innovation cycles.

One small but very important piece of the puzzle is geolocation compliance. It’s one of the most common customer issues for online gaming customer service teams. It’s safe to say gaming consumers see geolocation as annoying. As a consumer who has personally experienced these issues, I have always felt that this critical aspect can be substantially improved. There is an opportunity to improve accuracy, reliability, performance, and user experience. Operators’ fraud management and customer service teams also rely on the geolocation backend dashboard and tools, and there is an equally meaningful opportunity to deliver a better experience on this front.

When the opportunity to join Xpoint arose, I was excited about working with a brilliant team to help improve this aspect of the overall user experience. Given our more efficient system and lower operating costs, I also realized that there is an opportunity to provide attractive pricing to operators. This allows operators to accelerate their path to profitability. 

That is an interesting history. How do you think your experience sets you apart as a CEO running an earlier-stage company? What have the first couple of months looked like since joining? Coincidentally, in our primer earlier this year, we discussed how having more operating experience was going to be a point of differentiation for earlier-stage companies versus the 2020/2021 environment; is this a benefit in your view?

I am always focused on product-led growth. Delivering a WOW experience to an end user or a business customer is the vision and mission. This requires a multi-disciplinary understanding of game design, betting systems, regulations/politics, modern tech stacks, data science, and, most importantly, people and what motivates them.

I love early-stage. It’s where things are most uncertain and where there is the most opportunity to shape the direction. The higher-risk, higher-reward aspect of earlier-stage companies and initiatives deeply appeals to me. It’s also where I find the like-minded risk-takers and intensely passionate people I enjoy working with.

My first few months at Xpoint have been great. We have a very solid team across product, engineering, and compliance. We have incredibly supportive investors. And, we have a tremendous opportunity to gain significant traction in a market that a single provider presently dominates. Since I joined, we have honed our go-to-market plan, set the stage for growth, and worked to build an entrepreneurial culture that values engineering and innovation. We’ve also acquired licenses in more states and accelerated our efforts to be licensed everywhere.

As to your last question of whether having operating experience is a benefit, the answer, in my case, is definitely yes. I think from an operator’s perspective. Specifically, how do I delight the end user and improve unit economics that drive valuation? That allows me to think about how Xpoint can contribute to those efforts. Without that perspective, having a clear roadmap would be more difficult. 

Xpoint operates in gaming compliance—particularly geolocation, with basically one large competitor, GeoComply, that you had some notable litigation against. Keeping this at a high level, how can Xpoint disrupt the incumbent beyond price? How do you see the company differentiating from the competition? Also, do you see some of your customers trying to take geolocation in-house, or will the regulator demand separation of “church and state” as well as redundancy?

GeoComply has built a very robust business. I admire that. However, this market is not a winner-take-all market. Xpoint will get its share of the market. This will require perseverance, grit, innovation, and competitive pricing.

In the short term, we are focused on executing incredibly well on location accuracy, spoofing detection, reliability, response times, reporting, customer service, and ease of integration. This requires excellence in engineering and an ability to innovate and deliver updates quickly.

In the longer term, we see data as a critical differentiator. Ultimately, we want to help operators improve their unit economics. We are confident that we can deliver raw data and actionable insights drawn from that data to help operators drive incremental revenue.

I don’t know if some customers will try to take geolocation in-house, but I doubt it. Geolocation is far more complex than it seems from the outside. It’s not easy to detect all forms of spoofing, conduct detailed testing across a myriad of jurisdictions to ensure location accuracy, and meet varying regulatory requirements across jurisdictions. On top of all of this is the need to develop a backend dashboard with detailed reporting, audit logging, and insights. We have already spent eight figures on developing our platform, and yet there are endless things we can do to continue to innovate. If I were running an operator, I don’t see how I could justify developing an in-house geo-compliance solution versus allocating  those resources to other growth drivers more in line with our core competencies. I also believe regulators will keep geolocation separate to improve compliance.

Since joining the company a few months back, how do you see the next 12–18 months playing out? What are the biggest goals/targets near term for the company? What’s on the product roadmap (that you can share)?

Our current goal is to be fully prepared to serve tier 1 operators. We’re almost there. This includes securing licenses across all states (we have 12 already) and ensuring Xpoint has equal market access in the current monopolistic environment. Our platform is ready for tier 1 operators. Of course, we will always continue to invest in advancing its capabilities.

The environment for raising money has obviously changed quite a bit in the last year or so; how well funded is the business, and how are you balancing the need to grow versus managing cash burn? What are the next steps for Xpoint in terms of its capital needs?

We are incredibly fortunate to have very supportive investors. The venture funds backing Xpoint are the who’s who of the industry. As long as the Xpoint team continues to deliver on its plan, which we will do, I do not foresee any challenges for funding.

Furthermore, on the capital-raising front, Xpoint has done a good job raising money from many familiar faces that invest in the sector like Bettor, Acies, and Courtside; is it ultimately more important to expand into more diversified VC investors? Given that you operate from a B2B perspective, do you see the ability to bring in a broader investor base since you are not an operator, and can you get nontraditional gaming investors comfortable about potential licensing requirements?

There is no rush to diversify our investor base unless it accelerates growth for us. The gaming industry is complex due to licensing and other factors, and it benefits us to have investors who understand the landscape and ecosystem exceptionally well. When the time is right, we will diversify our investor base.

Xpoint has an interesting setup for a company at its lifecycle with offices in the U.S., Columbia, and Dubai. How do you manage a company in so many different time zones at this stage? Are you on the road most of the time? Is this something you see evolving?

We are a U.S.-focused business with engineering primarily located in Dubai and a satellite office in Columbia. We are very fortunate to have great talent. We’ve had to streamline a few things to ensure we’re running at maximum productivity, but remote working is very feasible these days with the right processes and tooling. It works smoothly for us now, as it does for many software engineering companies. As a result, I do not have to engage in excessive travel and can focus on the execution of our game plan.

From an industry perspective, the obvious tailwinds for your business are the U.S. legalizing additional states for both iGaming and Online Sports Betting. What other tailwinds do you see as the biggest catalyst for your business near term and long term? What are the headwinds?

The present economic environment has resulted in operators becoming highly focused on profitability. This is an important tailwind for us. With a modern tech stack, our operating costs are very efficient, so we can price our solution more attractively. Soon, we will also start leveraging the data we collect to help operators increase LTV, further accelerating their path to profitability.

Additionally, operators need redundancy when it comes to critical service providers. We think it’s crazy that operators have multiple payment and KYC providers but only one geolocation service provider. If the geolocation provider goes down, revenue stops. So why would it not make sense to have a backup? We believe states should mandate it, as it also protects state revenue. The operators we are talking to recognize this and want to have redundancy. 

The primary headwind we face is market access. There is one company that is a monopoly now, making it difficult for us to have equal access to the market. We will address this situation head-on.

Historically, many of your customers are on the fantasy side or earlier-stage OSB with small market shares. We are long-term bullish on some of the players you are working with, like Sporttrade and Mojo. With that said, do you plan to try and bring on some of the tier 1 operators such as DraftKings, Flutter, and BetMGM?

We have great clients and have no doubt some of them will grow significantly. That said, we understand this market is very concentrated among a handful of operators, and we are very focused on winning these major accounts.

Following up on this question, Xpoint operates solely in the gaming industry—do you see the product evolving to other industries, and do you plan to take your technology to other fast-growing international markets? Long term, what does the exit path look like for the company?

For the foreseeable future, we are fully focused on the gaming industry. It is a unique industry with specialized needs, and we must keep our eye on the ball. We are concentrating our efforts on North America at this time. In the near future, we will get into international markets. Eventually, we may look beyond the gaming industry.