The Innovators: BTX Racing

Cover image courtesy of BTX Racing

Before venturing into BTX, Piek was a chartered accountant. That career, he says, gave him extensive exposure to the business processes in a range of industries. Crucially, it sparked an idea, an opportunity ripe for the picking, which formed the basis of BTX Racing. The idea was simple: A repurposing of an existing technology to enable a better and more efficient owner experience.

If you have heard of Blockchain technology, you’re unlikely to associate it with horse racing. At the latest Asian Racing Conference earlier this year, we learned from tech entrepreneur and former South China Morning Post CEO Gary Liu about blockchain’s potential to garner a new wave of support for racing amongst Gen Z.

Liu’s premise was that tangential activity seen in other sports, such as the NBA - in which fans trade official (but purely digital) tokens, players and even point-winning highlight reels - could easily be transferred to racing.

However, that area is nascent, and certainly hasn’t reached your everyday racing fan. Piek’s venture could be a steppingstone, as it utilises the same technology but in a model the industry is accustomed to.

If you’re less familiar with blockchain, consider it essentially a decentralised ledger of activity. Each block in the chain could be a monetary transaction, as underpins cryptocurrencies, or it could be BTX Racing selling a 0.01 per cent share in a yearling to Joe Bloggs.

BTX has been up and running for several months using the now not-unfamiliar model of racehorse micro shares and, on the face of it, it’s nothing new. Nor is success with the model - quite the opposite. America’s greatest race has twice been won with micro-share owners holding a stake - hundreds of MyRacehorse customers watched Authentic (USA) (Into Mischief {USA}) win the 2020 G1 Kentucky Derby, this year followed by Mage (USA) (Good Magic {USA}), whose ownership contains a not-insignificant share from Commonwealth Thoroughbreds.

Offering something new, we reached out to Piek after he launched the latest strand of BTX - an avenue he believes they are the first in the world to pounce on.

A new model

Pre-registration is now open for BTX Breeding Ownership, advertised as the world’s first micro-breeding opportunity. Available to the public on Friday, buying in will give you a stake in five broodmares carrying pregnancies to three hot young sires: Russian Revolution (two), Stay Inside (two) and Maurice (Jpn) (one).

Pre-registering gives you access to a slick brochure, which comprehensively explains the investment opportunity in layman's terms and includes a page of common definitions - though it certainly wouldn’t bore the experienced breeder.

Gallery: Buying in to the BTX Breeding Ownership will give you a stake in five broodmares carrying pregnancies to three hot young sires

Partnering with a high-class Victorian farm, and receiving external bloodstock advice, Piek has put together a package which will run for two years.

“It's a two-year ownership experience, which will mean you get ownership into 10 foals, all going well, and we'll be going to the auction to sell each of those,” Piek explained.

“This will be a journey over the next two years as we go through the breeding cycle and we'll be communicating with the owners as we go, working closely with the breeding farm.”

Although the resultant foals will be targeted to whichever sale they’re most suited to, Piek aims to provide a ‘mixed experience’ if possible, selling some as weanlings and others as yearlings.

“As part of the sales strategy, the owners will come on that content journey with us, which is not meant to be a hidden process,” he said. “We want to make this an open and transparent process, and actually take people on the breeding experience.”

Whilst trainers have been catering for syndicates for years, the new strand to BTX puts a fresh part of the industry within the same reach. Piek’s going further though, aiming to create a true community in this (and every) ownership model offered by BTX, to offer a ‘unique proposition’.

“It's not just about buying and then you get an ad hoc update,” he declared. “We want to bring those people together. We want to provide content to them. We want to have an event at the auction with all our owners and bring the ownership community together.

“We had an overwhelmingly positive response from our database when we recently surveyed them,” he reported.

“Everyone wants to buy more horses. They want more experiences and offering a differentiated product was absolutely key to them; breeding is one of those.”

Taking the lead on responsible ownership

A few months on from their launch, BTX holds a database of some 4000 people, which Piek describes as generally more youthful than your typical racehorse owner. Those well-resourced enough to buy into horses on their own “will likely stick to that tradition”, Piek politely suggests; although it’s an opportunity for existing owners to diversify their portfolio and for BTX to focus the new wave of owners that micro shares could encourage.

“What we've found over the last 12 months, with these economic times, (is that) some people actually want the experience of owning multiple racehorses, and as the pricing of racehorses goes up, technology is enabling us to actually own smaller shares,” he said.

“Just because it's a micro share, doesn't necessarily mean you get a worse financial performance from the horse. And, we collect prepaid training fees up front, so that you don't have to pay any more ongoing fees.

“Any unused training fees or expenses at the end of the scheme will actually get returned to its owners - people probably don't appreciate the modelling around it.”

The level of interest suggests that BTX is on to something, and with that influx comes an important opportunity too, and one that Piek has embraced, much to his credit.

“This is an alternative investment class for most of our owners. It's an experience-based investment, but they are also new to racehorse ownership,” he said.

“So, we're definitely trying to educate them around what it means to train a horse, how much work goes into the horse, and how do you actually get a racehorse to the track?”

Terming education ‘key’, Piek hasn’t stopped there, putting welfare front and centre of the BTX experience.

“We actually collect a minimum of $2.50 from every ownership sale, which goes to a rehoming fund for that particular horse. That's quite unique as an organisation, to try and put responsible horse ownership at the forefront of what we do.

“Whether that's rehoming the horse, or whether that's getting a veterinary check before it goes off to a new ownership group - basically, at the end of a racing life being able to provide the opportunity for a horse to be cared for and looked after.”

Still openly looking for partners in that space, Piek won’t be drawn to judge the efforts around welfare of the PRAs, but instead points out another advantage of blockchain technology.

“When you look at how you would actually collect $2.50 from a thousand people for every single horse, that's quite a manual process. But, now that you start to use tools such as blockchain and automation to do that based on smart contracts, I think it's only now opening the opportunity for us to look at these new ways.

Watch: The BTX Welfare Initiative

“I don't think our solution is the solution to solve all problems, but I do see this as something that could be a scalable solution for the industry for sure.”

Out of the blocks

A young business in a game that can take years to produce results, Piek recognised the need for some early action that BTX customers could enjoy. This latest announcement comes off the back of just that, after Chaillot (Testa Rossa) placed third in the G1 Tattersall’s Tiara on June 24.

Typical of Piek, however, this wasn’t a traditional share agreement, and exemplifies one of the major benefits of using the blockchain technology which underpins BTX’s operations - flexibility and innovation.

“With Chaillot, she was actually available at 0.05 (per cent shares), and it was only a three-month ownership opportunity,” he explained.

“What we did was actually shorten the value of the ownership period, but that meant you got a bigger share of the horse for the Group races.

“We're trying to use technology to essentially bring in new ownership models. There's micro ownership, but we see micro ownership as a three-month opportunity, or it could be own for the race.

“There's some exciting things you can do with the technology there.”

Easy pickings by Piek’s standards is another BTX model aimed at boosting the owner experience whilst remaining affordable. Buy into their Fillies Pack and you’ll receive a share in four fillies, two rising 3-year-olds and two 2023 Magic Millions Gold Coast Yearling purchases.

All four are in training with Ciaron Maher and David Eustace, with Victoria’s leading stable by all accounts embracing the BTX vision of innovation and engagement.

Gallery: The four fillies included in the BTX Fillies Pack, images courtesy of BTX Racing

Once you move below single-percent shares, it’s fair to say that the law of diminishing returns on your fun as an owner does not apply, and a testimonial video featuring Ciaron Maher assures prospective owners of the same level of insight and updates as any other owner.

But Racing Australia allows only 20 named owners (i.e. down to five per cent shares) and, although Australia is renowned for catering for syndicates, ownership numbers in the hundreds does exceed the capacity of a winner’s enclosure, say.

This is far from a problem, Piek argues.

“We've actually found in our current database that there is definitely that portion of people that love coming to the races, love coming out, coming to the mounting yards with us,” he said.

“But there's also a big portion that really like the digital experience. We've built our own front-end mobile application where we've got a newsfeed. So, it's a bit like social media for your horses, and you can see all your training content coming in.

“You can look at our marketplace, follow some other horses. For us, that digital experience we're seeing is actually a real focus for some of the younger generation.”

Encouraging the industry to embrace novel technologies, Piek says that not every part of his vision for BTX is yet attainable. An obvious next step for his platform, in his mind, is to allow users to trade their micro shares - something he’s unable to implement just yet.

“Like so many other industries adopting visionary technology, the regulations generally take time to catch up, but it gets there in the end,” he noted. “The vision for BTX is to bring the next generation of owners into the industry, across racing ownership, breeding ownership and ultimately a new ecosystem for racing.”

It seems unlikely that Piek will stop innovating anytime soon. Considering that BTX is targeting a new pool of owners amongst the next generation, and that Piek has put welfare and education front and centre, let’s hope they have every success.