Just as news of a potential investment agreement between DraftKings and Fox Sports is on the verge of being announced, FanDuel pushes its chief rival off the stage with a major windfall in financing.
The New York Times reports that the daily fantasy sports provider will announced that it has raised $275 million in its latest round of funding, pushing its total haul from investors up to $363 million. According to industry insiders, that will boost the value of FanDuel “well north” of $1 billion.
How staggering is that $275 million total? As Legal Sports Report points out, it tops the overall amount raised by the entire daily fantasy sports industry, which up until this point equaled $223 million.
The new backers mentioned by the NY Times in this latest round of funding include Google Capital and Time Warner. NBC Sports Ventures and Comcast Ventures were among previous investors who again participated in this investment round. Those companies (along with Yahoo! Sports’ recent entry into the space) are obviously bullish on the future success of daily fantasy sports.
Ted Oberwager, a principal at Kohlberg Kravis Roberts, one of the largest Wall Street alternative investment firms, expressed exactly such a sentiment to the NYT‘s Michael J. de la Merced.
“We think it’s one of the most valuable kinds of media today,” Oberwager said. “Fantasy sports offers some of the highest levels of engagement that we’ve seen.”
Such an enormous amount of funds generated would presumably position FanDuel as the industry leader, especially if DraftKings’ rumored deal with Fox Sports doesn’t end up happening.
While building new products and attracting new customers is a priority — with the opportunity to now offer humongous prizes to fantasy players — that kind of money would allow the company to reach beyond marketing agreements with individual teams or sports leagues, moving toward deals with arenas and stadiums. Or maybe the biggest prize still available.
Does this enormous amount of funding put FanDuel in position to make a deal with the NFL? Such an agreement would surely dwarf the partnership DraftKings has with MLB. (FanDuel already has an agreement with the NBA and seven of its individual clubs, in addition to deals with four NFL teams.)
FanDuel chief executive Nigel Eccles told the NYT that an initial public offering was an eventual possibility for the company, though such a move was not likely to happen soon.