Fantasy-sports app Underdog valued at $485 million in a funding round
- ByStartupStory | July 27, 2022
App promoting fantasy sports, Underdog, announced the closing of a second financing round valued at $485 million, with aspirations to expand into the booming sports betting sector in the United States. Underdog announced a $35 million B round led by BlackRock & Acies Investment, a venture capital firm specializing in sports betting & online gaming. Underdog claims it plans to expand beyond fantasy sports games into sports gambling, which has quickly evolved into a $4 billion business in the United States. Next year, the business intends to open legal sports betting services in Ohio and Colorado.
According to Underdog’s founder, Jeremy Levine, the firm has increased its client base by designing games that are distinct from those given by large corporations in the market today. The corporation has refused to reveal the number of clients it has. “The rest of the firms, they see themselves as sportsbook companies.” “Mr. Levine explained. “We prefer to conceive of ourselves as a game studio operating in a regulated betting environment.”
Both DraftKings Inc. & FanDuel began in fantasy sports before venturing into the booming online sports betting sector in 2018. As new states allow sports betting, fantasy sites and large casino operators have already been fighting for market dominance, spending millions on promotion and advertising to gain new clients. Underdog’s games include “best ball,” a fantasy game wherein players do not need to maintain their lineups week after week after the first draught. Mr. Levine stated that the firm will offer classic sports wagering as well as unique options such as betting throughout live games in sports betting.
Mr. Levine previously launched two fantasy sports businesses. In 2014, he traded the assets of StarStreet, an early fantasy site, to DraftKings. He founded Draft, a mobile-focused fantasy site that was purchased for $48 million in 2017 from Paddy Power Betfair, known commonly as Flutter Entertainment PLC, the parent company of FanDuel. As per Fantasy Sports & Gaming Association, almost 70 million individuals in the United States wager on sports or participate in fantasy sports, having nearly 60 percent doing both. According to the organization, the number of individuals wagering on sports has increased by 20% over the previous year, and the popularity of the game fantasy sports has increased by roughly 14% over the previous year.
Sports betting is already legalized in 35 states and territories of Columbia, with many others considering joining the market, including California. Sports betting produced over $4.3 billion in revenue last year, and Eilers & Krejcik Gaming analysts predict the market will rise to nearly $20 billion by 2026. Underdog now employs over 165 people and expects to add 100 more in the coming year. Previous investors have included Mark Cuban, Kevin Durant, & Breon Corcoran, the former CEO of Paddy Power Betfair, among many others, according to the business.
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