Online sports betting giant Betfair is to go ahead with a flotation expected to value the company at around £1.5 billion (€1.8 billion).

The planned listing on the London Stock Exchange will enable founders Ed Wray and Andrew Black to sell some of their stake in the company.

They launched Betfair 11 years ago and own a combined 24% stake in the firm, which has become the world's leading online sports betting site with three million registered users.

The flotation has been expected for some time, driven by the company's strong financial performance and strong growth.

In the year to April, net profit was £15.1m while revenue grew 13% to £340.9m.

Betfair was one of the pioneers of person-to-person sports betting by developing a market place, or 'betting exchange' which allows customers to bet at odds sought by themselves or offered by other customers, bypassing the need for a traditional bookmaker.

Betfair is not issuing any new shares or raising any cash from the IPO, but said the flotation would enable it to expand more quickly than if it remained as an unlisted company.

'It is important that we remain as flexible as we can be and the listing gives us that. Being a listed company in many jurisdictions makes the licensing process more straightforward,' CEO David Yu told reporters on a conference call.

The IPO market has suffered a string of disappointing outcomes in recent months as investors drive a hard bargain in turbulent market conditions. British online grocer Ocado had to drop its IPO price at the last minute, while energy firm Fairfield and fashion retailer New Look postponed flotations.