Sydney-based Waterhouse VC, a venture capital firm focused on wagering technology investments, announced its financial performance for 2025 on January 26. The firm reported a gross return of 12.6% over the year, achieved despite a 7.7% negative impact from currency fluctuations due to the Australian dollar’s appreciation against the US dollar. This performance is significant as it reflects the firm’s strategic focus on the burgeoning wagering technology sector, an area that remains underrepresented in traditional venture capital portfolios, underscoring Waterhouse VC’s niche positioning in the global gambling ecosystem.
Throughout 2025, Waterhouse VC’s investment team was actively engaged, examining over 450 potential investment opportunities and conducting detailed due diligence on 66 businesses. This rigorous process culminated in six new option deals, highlighting two major trends that are poised to shape the industry’s landscape in the coming year. Notably, prediction markets have begun evolving beyond niche gambling products into financial instruments, a transition that presents both opportunities and challenges as regulatory frameworks adapt to these innovations. Additionally, the application of Artificial Intelligence within operator technology stacks has surged, with an emphasis on AI’s potential to enhance user experience through personalization and social gamification, though Waterhouse VC maintains a stringent evaluation process for potential AI-based investments.
Among the portfolio companies, Voxbet is noteworthy for its upcoming feature “Pass The Bet,” which enables users to collaboratively build and share parlay bets. This feature aligns with the growing demand for social betting and addresses the high-margin potential of parlays for operators, evidenced by similar offerings from major US players like FanDuel. Voxbet’s “plug-and-play” capability offers operators a streamlined integration process, positioning it favorably in the market.
Another standout in the portfolio is a company operating in the live dealer casino segment, which has achieved significant operational scaling across various platforms and jurisdictions. This business has yielded substantial returns, generating 19 times the initial investment in dividend income, marking it as a crucial contributor to the fund’s growth.
Waterhouse VC continues to implement a systematic global equities strategy to manage capital reserves, avoiding discretionary stock picking. This strategy involves monitoring top investment managers, focusing on companies with strong growth potential and conservative balance sheets. As of December 31, 2025, the Information Technology sector constituted a smaller portion of the portfolio compared to the S&P 500, providing a diversified foundation to withstand sector-specific volatility.
Looking ahead, Waterhouse VC is set to intensify its focus on high-leverage opportunities within its existing portfolio, particularly with listed entities like Racing and Sports (RAS). The firm is also closely watching the regulatory developments in New Zealand concerning online gaming and casino licensing, which could offer substantial market entry opportunities for infrastructure providers facilitating compliant operations.
Addressing the issue of turnover leakage to illegal offshore operators remains a priority for Waterhouse VC. In markets such as Australia, a significant percentage of racing wagering is channeled to the grey market. The “product gap” created by domestic restrictions on online casino games and live sports betting has exacerbated this situation, leading to substantial financial outflows. The firm emphasizes the need for new integrity technology solutions to recapture this lost liquidity and ensure market compliance.
As Waterhouse VC approaches its soft close target, it plans to leverage its established network and expertise to drive further performance. The fund is shifting its approach from external opportunity identification to building internal capabilities that have historically driven the highest returns. This strategic evolution reflects the firm’s commitment to addressing the industry’s complex challenges while enhancing its investment approach. With the continued development of the regulatory landscape and market dynamics, Waterhouse VC is positioned to navigate the evolving wagering ecosystem effectively.