Underdog Fantasy has revealed ambitious plans to build licensed sports betting products and hire more than 100 staff following a major capital injection.
The New York-based start-up, which was founded in 2020, has just completed a Series B funding round worth $35m, which now values the company at $485m.
The round included accounts managed by US investment giant BlackRock and gaming-focused venture capital fund Acies Investments.The company is a real-money DFS disruptor that now plans to expand into mobile sports betting amid an aggressive hiring spree.
Underdog has attracted high-profile investment to date, even without the latest funding round. The business is supported by US sports stars including Kevin Durant and Odell Beckham Jr and rap royalty from Nas to Future, as well as globally renowned DJ Steve Aoki.
Industry backers include former Paddy Power Betfair CEO Breon Corcoran and boutique research firm Eilers & Krejcik Gaming, while business nous has been added from outside the sector with support from US billionaire Mark Cuban and Zynga founder Mark Pincus.
Underdog has garnered attention from the within the US sports betting industry due to its ability to acquire valuable sports-savvy customers without excessive spend on marketing.
“While the typical sportsbook is spending over $500 to acquire a customer, Underdog is bringing in new users for a fraction of that,” said Chris Grove from Acies Investments.
“Underdog’s product is leading to competitive advantages as Underdog’s customer acquisition and retention success is best in class.
“Underdog’s success is driven by the company’s focus on building new, innovative games and delivering amazing customer experiences.
“As the company moves into licensed sports betting, I believe that the unique focus on product and experience will reshape the industry,” he added.Chris Grove: “As the company moves into licensed sports betting, I believe the unique focus on product and experience will reshape the industry.”
Underdog has recently launched a $10m season-long NFL Best Ball DFS tournament, which is the largest season-long fantasy prize pool ever.
It is worth remembering that two of the biggest operators in US sports betting – FanDuel and DraftKings – started out as DFS companies before expanding into online gambling following the repeal of PASPA in 2018.
Underdog founder, president and chairman Jeremy Levine said the latest funding round would provide the company with the “firepower” required to build for the future.
“We’re excited to continue to innovate and build new experiences from the ground up in fantasy, sports betting and the adjacent spaces.
“We’re thrilled that funds and accounts managed by BlackRock are participating in our Series B as we continue towards our vision.
“Our players, and players of the future, are going to be delighted by the experiences they’ll be able to enjoy exclusively on the Underdog platforms,” he added.