Dragon's Den Reality Show Invests £200K in Bingo Affiliate

A forum thread was recently posted about the reality show Dragon’s Den and an investor’s £200,000 investment in a bingo affiliate. The thread attracted quite a bit of conversation, and so we decided to look into this story. Here’s what we found.
In 2007, an investor on the BBC2 reality series Dragon’s Den  threw down a £200,000 investment for a 30 percent share of Gaming Alerts Limited, a UK bingo affiliate site. That’s quite a high valuation for a bingo site, so where does it stand nearly five years later?
UK Shark Tank
Dragon’s Den is the BBC version of the popular show Shark Tank. Entrepreneurs appear on the show pitching their businesses to a panel of investors who then negotiate a deal to work with them.
On this episode, Dragon Theo Paphitis, a British retail magnate, was the only investor willing to take a chance on an affiliate site. The other Dragons took a pass on the offer because they weren’t completely sold on the business model.
Gaming Affiliate in a Nutshell
For gaming affiliates, the show was especially interesting because it so neatly encapsulated several industry trends into one TV-ready moment.
Gaming Alerts Limited went to the dragons for an investment because they felt the UK bingo market was entirely too crowded but that affiliate bingo still had some potential. So, armed with a fistful of research the company founders, Emmie Matthews and Ed Stevens, pitched the Dragons on the idea of a Spanish expansion.
Anyone familiar with the European gaming industry knows that the Spanish market is huge and still very much in play. Just last week, the affiliates went ahead and launched http://feriabingo.com, a Spanish-language site focused exclusively on bingo.
The pair also used the investor cash to open up new bingo forum to augment their UK operations.
Overvalued Sites?
In affiliate forums, including CAP, gaming affiliates debated the value of the bingo sites, pointing that that most of the Gaming Alerts forums seem fairly inactive. CAP forum poster deanimus pointed out , “I was surprised they got such an investment, the site looks as though it hardly has any traffic (empty forums etc) and there was nothing special about it, for £200k he could have easily built a good network of sites with a lot of marketing and branding and kept 100%.”
Five years later, do you think that Pahitis got a good deal? Let us know on our General Discussion Forum.