Earlier this yr, Lucra Sports founder and CEO Dylan Robbins did one thing that nobody else has ever completed.
He landed famed public investor Cathie Wooden and her ARK Make investments Enterprise Fund as a lead in a startup fundraising spherical.
Lucra introduced final month that it raised a $20 million Series B, led by the ARK fund, with participation from a number of different VCs. Robbins attracted ARK though the fund had beforehand gotten badly burned on an identical eSports firm: Skillz, a skill-based gaming platform during which the fund invested heavily before divesting at a loss.
On high of that, Dylan landed this massive fish as an investor though his firm is just not within the one space that each one VCs are at the moment chasing: AI.
Lucra provides white-label interactive gaming competitions as a novel form of loyalty program for companies that serve customers. Slightly than, say, incomes factors towards a coupon, Lucra’s shoppers provide on-line tournaments for prizes, or helps pleasant wagers between their prospects on who will win video games. Its prospects embody 5 Iron Golf, Dave & Buster’s, and Chess King.
Robbins informed us there have been two secrets and techniques in how he landed a big-name investor towards such odds:
1. Be pleasant to everybody, wherever since you by no means know when an off-the-cuff dialog will flip into your main investor.
2. Lead your pitch with AI even when you aren’t a famed AI scientist and aren’t constructing fashions, brokers, or something AI.
To the primary level, the seeds to Lucra’s fundraising journey started when Robbins was enjoying darts in a New York bar. He met one other man on the dartboard, they usually loved just a few video games collectively.
“Six months later, we bumped into one another on the bar once more. The identical darts bar. It’s like, ‘Good to see you. How’s it going?’ And we acquired to speaking and I requested him what he did for work. And he informed me he labored at ARK,” Robbins recalled.
Robbins informed him about Lucra and the contact launched him to the funding crew at ARK, which wound up writing a small verify in his Sequence A spherical.
“My first piece of recommendation on all of this is you by no means know who you’re speaking to. Simply go round, be good, meet folks, have enjoyable,” Robbins says. Let that result in good conversations, which is able to result in introductions, he stated.
Flash ahead just a few years to the top of 2025, when AI had overtaken enterprise funding like honeysuckle.
Lucra Sports activities had actually discovered its lane with its white-labeling service. It was prepared to lift a Sequence B to gas progress and new concepts like including mini-games into its choices. (Lucra simply invested in a mini-game growth companion to construct out this functionality.)
However Robbins stored operating into an AI-shaped wall.
“We have been elevating in This fall of 2025, which was then, like even now, form of peak AI mayhem,” Robbins stated. “One out of each three calls, the primary line, they’d cease the assembly and say, oh, we’re solely investing in AI now, I don’t need to waste your time. To the purpose the place they wouldn’t even let me pitch.”
The remaining informed him they have been solely investing in AI after they heard the pitch.
So Robbins tried a brand new tactic. He adjusted his pitch and his deck to debate AI proper out of the gate. The revised pitch argued that if AI works, individuals are going to have extra free time to play video games with mates on the bar or on-line — therefore his enterprise might be a winner — and if it doesn’t, a non-AI guess begins to seem like good diversification. It was a hedge both means.
“It was a small cohort of folks that would actually take it severely,” he stated of his pitch. ARK, happily, was certainly one of them. As soon as dedicated, the lead investor made introductions to different VCs to assist fill out the spherical.
Underpinning all of this have been good enterprise fundamentals, together with “constant yr over yr progress, not only one spurt,” he stated.
The ultimate lesson Robbins discovered was that, particularly for a non-AI enterprise, VCs need to hear an enormous dream. Robbins had one: a complete addressable market of anybody who performs video games of any sort, from pickleball to Wordle.
“So our TAM is nearly each American that’s 18 to 70, proper?” Robbins stated. Even so, he had one VC ship a rejection that he printed out and posted to the wall.
“I despatched them our progress chart and our TAM, which was like loopy, up into the suitable progress potential, enormous, massive, billions of TAM. And the response was: ‘TAM’s too small.’ That was the response. Like, our progress fee was too gradual,” he stated.
He stated this was a “reminder” to him “to suppose even greater.”
“I’ve to place myself in that mindset and actually swing for the fences if I need to increase enterprise capital cash,” he added.
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