Underdog Sports Raises $35M at $485M Valuation, Eyes Sports Betting

Underdog Sports Raises $35M at $485M Valuation, Eyes Sports Betting.

Costfoto / NurPhoto / Getty Images

Key Takeaways

Underdog Sports, the rapidly growing paid fantasy sports outfit, raised $35 million in a Series B round of financing, valuing the company at $485 million.

UnderdogAn add for Underdog Sports. The company raised $35 million, valuing it at $485 million. (Image: Twitter)

The Brooklyn-based company, which operates in the daily fantasy sports (DFS) realm, said it plans to use the fresh capital to hire more than 100 new employees and to push into regulated sports wagering. BlackRock, which is the world’s largest asset manager, and Acies Investment participated in Underdog’s latest funding round, joining an already star-studded list of investors.

BlackRock and Acies Investment join existing investors Mark Cuban, Kevin Durant, Trae Young, Odell Beckham Jr., Breon Corcoran (ex-CEO Paddy Power Betfair/Flutter), Mitch Garber, Eilers Krejcik, Liontree Partners, Kevin Carter, Mark Pincus (founder of Zynga), SV Angel, The Chainsmokers, Kygo, Steve Aoki, Nas, Future and many more,” according to a statement issued by the company.

Acies is a gaming-focused venture capital firm and its managing partners include former MGM Resorts International (NYSE:MGM) . In addition to Underdog, Acies has , Midnite, Tally, and US Integrity, among others.

Underdog Looking to Leverage

Underdog, which frames itself as a DFS option for players looking to avoid the professionals and computer-based models that dominate larger platforms, is looking to leverage an established playbook: Converting DFS players to sports bettors.

Since the 2018 on the Professional and Amateur Sports Protection Act (PASPA), FanDuel and DraftKings (NASDAQ:DKNG) have converted DFS players from their extensive databases to sports bettors. Today, the operators are the two largest online sportsbooks in the US.

“While the typical sportsbook is spending over $500 to acquire a customer, Underdog is bringing in new users for a fraction of that. Underdog s product is leading to competitive advantages, as Underdog s customer acquisition and retention success is best in class said Chris Grove from Acies Investments in the statement.

Underdog investors are hoping Grove is correct about the company’s ability to attract customers in cost-effective fashion. That s because customer acquisition and promotional spending are the primary hurdles operators face on their roads to profitability.

Underdog Could Be Just That

Underdog could be living up to its name. With its entry into the sports betting space, it’s forging into a hyper-competitive industry dominated by large players, such as FanDuel, DraftKings, BetMGM, and Caesars Sportsbook, among others.

Still, venture investors are allocating capital to sports betting upstarts, including Underdog. Last year, Murren was among the investors allocating cash to sports betting financial .

More recently, Las Vegas Sands (NYSE:LVS) took a stake in gaming technology provider and software developer Huddle Tech. Rap star Nicki Minaj invested in MaximBet. Those are just two examples of investors backing smaller sports wagering entities.

Article Sources
FanDuel Refuses to Pay out Winning Sports Bet in New Jersey, Regulators Investigating editorial policy.
  1. Danville, Virginia Requests Proposals from Casino Developers, But City Still Needs State Lawmakers and Voters to OK Gaming

Compare Accounts
×
Fontainebleau to Morph Into The Drew Las Vegas By 2020
Provider
Name
Description
Maine Tribal Gaming Rights Chopped from Massive Federal Spending Bill  Steve Wynn Scandal Improves MGM, Las Vegas Sands Japan Casino Odds, Threatens Macau Operations  Nevada Judge Orders Las Vegas Shooting Records to Be Released  Closed Indefinitely: Duterte Shuts Philippine Casino Market to New Developers, Orders Freeze on Licensing  Canadian Woman Suing Ex-Boyfriend Over $6.1 Million Lottery Win  Toxic ‘Third-Hand’ Smoke Lingers in Casinos Long After Bans Are Enacted, Says Study  Las Vegas Sands, MGM, Wynn, Others Tagged with Negative Credit Outlooks by Standard & Poor’s  New Daily Fantasy Sports Product Further Blurs Line Between DFS and Sports Betting  BetMGM Confirms Patron Data Breach, Rough Streak Continues for Sportsbook  Toxic ‘Third-Hand’ Smoke Lingers in Casinos Long After Bans Are Enacted, Says Study