Betfair Co-Founder Andrew Black to Quit as Company Confirms IPO

Andrew Black, one of two founders of U.K. internet betting exchange Betfair, will step down from his position as a non-executive director of the company, which Tuesday confirmed a long speculated-upon plan to list on the London Stock Exchange.

Buried on page six of the Intention To Float document it says:

Andrew Black and Chris Batterham, who are both Non-executive Directors of Betfair, will retire as directors at the AGM to be held on 6 October 2010.”

According to press reports Black and co-founder Edward Wray together hold a roughly 22% stake in the company. Black, a former professional gambler, and Wray, a former JP Morgan trader, can’t have failed to notice the valuations that reports have put on their business, the world’s largest online sports bettering company–up to £1.5 billion.

If accurate, this is a fairly eye-watering valuation for a company which, although undoubtedly fast-growing, generated just £53.5 million of adjusted EBITDA in the year to April 2010.

Could Black have been prompted to get out while the going was good, fearing that his baby may be heading in the same direction as Ocado, another recent high-profile U.K. technology IPO which, like Betfair, was primarily handled by Goldman Sachs and which is now trading at around 20% below its July offer price.

Betfair, which is profitable, is no Ocado. And a professional gambler should be able to handle a reasonable degree of risk. Nevertheless, the timing of Black’s departure, on the eve of the IPO, is intriguing.