Waterhouse VC January Update: 2025 in review

Summary

Waterhouse VC — Tom Waterhouse’s wagering- and gaming-focused VC fund — published its year-in-review for 2025. Since launching in August 2019 the fund reports a gross total return of +3,777% (annualised 78%) to 31 December 2025. In 2025 the fund returned 12.6% despite a 7.7% currency headwind as the AUD strengthened versus the USD. Returns were driven largely by the equities strategy, with dividends and a pipeline of option deals providing additional upside.

The newsletter outlines deal activity (450 businesses screened, 66 into due diligence, six new option deals), sector themes to watch (prediction markets maturing into financial instruments and rapid AI adoption across operator tech), and portfolio highlights such as Voxbet’s social-parlay feature and a fast-scaling live-dealer casino business that has returned 19x in dividend income to date.

Author style: Punchy — this is a focussed, no-nonsense update for investors and industry professionals; the fund’s metrics and theme calls are presented to show where real value has been captured and where management expects growth in 2026.

Key Points

Fund performance: gross return of 12.6% in 2025; +3,777% gross total return since inception (to 31/12/2025), before fees and assuming reinvestment of distributions.
Currency drag: a 7.7% headwind from AUD appreciation reduced reported USD-equities returns when converted to AUD.
Deal flow: 450 businesses screened, 66 progressed to due diligence, six new option deals added; 11 live option deals carried into 2026.
Themes for 2026: prediction markets are shifting towards recognised financial instruments; AI is now table stakes in operator tech, with opportunity in personalisation and social gamification.
Portfolio highlights: Voxbet’s “Pass The Bet” social-parlay feature offers plug-and-play margin expansion for operators; a live-dealer casino position has delivered 19x in dividend income so far.
Equities strategy: systematic 13F-style approach tracking elite managers, focusing on stocks <20x earnings; portfolio IT weighting c.9% vs S&P 500’s 32%, providing diversification without heavy mega-cap tech exposure.
Strategic focus: doubling down on proprietary pipeline formation, executing high-leverage plays (notably Racing and Sports), and capturing lost domestic wagering liquidity — Australians lose ~A$3.9bn/year to offshore platforms, forecast to hit A$5bn by 2029.

Why should I read this?

Short version: if you track wagering tech, gaming investments or market trends in betting, this newsletter saves you digging through earnings and pitch decks. It tells you where the money has been made, which sub-sectors are heating up (prediction markets, AI-driven personalisation, social gamification), and where the fund will hunt for growth in 2026. If you’re in the industry or invest in related tech, it’s proper useful — quick, sharp and practical.

Context and relevance

Waterhouse VC is focused on the “picks and shovels” of the global gambling ecosystem — infrastructure, operator tools and distribution. The fund’s strong historical returns and active deal pipeline make its thematic calls worth noting: prediction markets moving toward mainstream finance could expand the bettable surface area across culture and news, while AI-first operator tooling targets measurable commercial gains through personalisation and engagement. Regulatory shifts (eg. New Zealand online gaming licences) and integrity tech to recapture offshore wagering flows are highlighted as near-term market drivers.