And just like that FanDuel has raised the stakes on DraftKings and the $41 million in new funding they announced last week, by announcing a $70 million dollar investment that will kick in just in time for the fantasy football season. Including DraftKings announcement earlier this year the two companies combined have raised over $150 Million dollars in venture capitalist dollars in 2014 alone. At this point everyone seems to be betting that daily fantasy sports are here to stay. Big volume increases are expected to be the norm for the next three to five year growth period of the industry.
Financials
When FanDuel previously released their financial records, it was shown that the four months that make up football season account for over 40% of FanDuels revenue for the year. That figure will only continue to grow as more and more season long players test out the daily fantasy landscape. FanDuel expects over 700,000 unique players to play on FanDuel at some point this year. Right now they have around 200,000 customers so the growth is expected to come extremely fast and sudden. With the $70 Million dollars FanDuel representatives are quoted as saying
The company says it’s adding seasonal customer service workers, building out its technology, and increasing spending on marketing. FanDuel also wants to leverage its relationship with one of its newest investors: NBC Sports. The two companies have already been working together, with NBC promoting FanDuel through its Rotoworld fantasy website. Nigel Eccles, FanDuel’s chief executive officer, wants his company to graduate into a role among NBC’s (CMCSA) television sports coverage through on-air discussion of daily fantasy games.
Other companies that were involved in the funding of the $70 Million include the following:
Shamrock Capital Advisors, which last year sold the Harlem Globetrotters and has invested in numerous other sports ventures, led the Series D round in FanDuel. NBC Sports Ventures also contributed, as well as private equity firm Kohlberg Kravis Roberts& Co.
Existing investors Bullpen Capital, Pentech Ventures and Comcast Ventures, the venture arm of Comcast Corp., also participated.
The Excitement
The hope among industry insiders is that the parternship with NBC Sports will bring daily fantasy sports into the mainstream American culture and no longer be viewed as a gambling hobby. This partnership with NBC Sports significantly helps as people are just waiting for a major site to offer daily games as well as season long leagues. A site along the lines of espn, yahoo, cbs or even nfl.com could provide a third alternative to daily fantasy sports and bring more casual players into the market.
This is an exciting day for all of us who have watched the growth of this industry over the last few years. I have talked to friends about daily fantasy sports for three years and finally some are starting to try this new and exciting form of fantasy. We may be on the verge of a Chris MoneyMaker poker like boom that will be extremely profitable for those engaged individuals who are willing to put the time and effort into being successful daily fantasy sports players.
