FanDuel to announce completion of a new round of financing
News on 14 Jul 2015
News on 14 Jul 2015
The publication VentureBeat reports that one of the leading companies in the daily fantasy sports vertical, FanDuel, is about to announce that it has raised $275 million in a new round of financing, bringing its total financing to date to $363 million.
The new investment was led by Kohlberg Kravis Roberts, an existing investor, and included the new investors Google Capital and Time Warner. Several previous backers also participated, including Shamrock Holdings, the investment arm of Roy E. Disney’s family; NBC Sports Ventures; and Comcast Ventures.
The new capital will be deployed to further build the customer base through marketing and new features, and expand the company’s global presence in a booming market.
Both FanDuel and rival DraftKings take advantage of carve-outs in the Unlawful Internet Gaming Enforcement Act of 2006.
FanDuel is expected to award about $2 billion in prizes this year, up from $560 million last year, according to its chief executive, Nigel Eccles.
Eccles says the number of Fanduel active users over the first half of 2015 has grown 300 percent from the same time a year ago, when it was around 1.1 million users.
Ted Oberwager, a senior exec at the Wall Street alternative investment firm KKR which helped FanDuel raise the extra capital, is bullish on DFS, saying this week:
“We think it’s one of the most valuable kinds of media today. Fantasy sports offer some of the highest levels of engagement that we’ve seen.”
Our readers will recall that last week Yahoo unveiled plans to expand into daily as well as more traditional fantasy sports activity.
Eccles dismissed that threat, telling VentureBeat that the business of running DFS leagues is built on sophisticated trading systems and is more difficult than many realise.
“If they’d launched two years ago, I think they would have had a good chance of competing,” he said of Yahoo. “They definitely have reach, but one of the things that’s missing from the conversation is how challenging it is to build and operate this product.”
Eccles, who claims FanDuel currently has a value of “well north” of a billion dollars, said that he would not be interested in a Yahoo acquisition offer.
