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It’s Opening Day for the NFL and FanDuel Closed Their MEGA Round Just in Time

 

FAN DUEL FUNDING

Ok, so maybe it’s a coincidence, but it’s not a big surprise, when you happen to be the market leader in one-day fantasy sports, paying out over $10 million in prize money every week.

Which is why the five-year-old fantasy sports site just raised a $70 million Series D round, led by Shamrock Capital Advisors with NBC Sports Ventures and KKR participating.  Existing investors Comcast Ventures, Pentech Ventures, Bullpen Capital, Scottish Enterprise and serial investor Richard Koch also participated.

FanDuel CEO and Co-founder Nigel Eccles talks about the company’s latest home run.

What was the funding process like?

Compared to earlier rounds, it went very smoothly. There is a lot of appetite for high growth tech companies and for sports technology, so we were well placed. We originally went out for a much smaller round, but increased the round size in response to investor interest.

What are the biggest challenges that you faced while raising capital?

The daily fantasy sports industry is still very new, so it required a bit of education. But once they saw our financials and understood our business model, it wasn’t that difficult.

What factors about your business led your investors to write the check?

We have incredible growth and a compelling business model.  We’re looking at consistent year over year growth of 3x and 75% gross margins.  Sports is also an area where you have a committed, passionate audience, so being able to offer a product that furthers the sports fan experience created a very compelling proposition for our investors.

What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?

In the early days of FanDuel, we survived on very little capital. To counter that, we became very disciplined and quantitative. Even today, after raising $70 million, we are laser focused on making sure we spend it wisely.

Where do you see the company going now over the near term?

We are using them money to expand the team, invest in the product, deepen relationships with the networks and leagues, and also invest in our live events business. This football season we will host the World Fantasy Football Championship that culminates in a live final in Las Vegas. The winner of that event will take home $2 million dollars. Not bad for a $10 entry fee.

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