FanDuel, the leading daily fantasy game provider, has secured an additional $70 million in funding. Investors include Shamrock Capital Advisors, NBC Sports, Comcast Ventures, Kohlberg Kravis, Roberts and Co, Pentech Ventures, Bullpen Capital, Scottish Enterprise, and Richard Koch.
The New York based company had previously closed funding in January 2013 for $11 million that included some of the same investors such as Comcast Ventures, Richard Koch, Scottish Enterprise, Pentech Ventures and Bullpen Capital. FanDuel's funding history include $1.3 million in April 2012, and $4 million in September 2011.
Since January of 2013 the company has grown from 40 employees to about 79 employees that are located in both New York and Edinburgh.
This investment in the daily fantasy game provider market is in addition to rivals,DraftKings' $41 million in series C funding last week. FanDuel and DraftKings have recently engaged in a public dispute for the title of the leading daily fantasy site.
FanDuel has disclosed in Q2 of 2014, that the company had $6.2 million in revenue based on a payout of over $72 million in prizes to its users. In addition, the number of paid actives for the site more than doubled to 93,961 from the previous quarter a year ago. FanDuel projects to make $40 million in revenue this year.
They also expect to have 800,000 people to play daily fantasy this year.
Commentary:
According to CEO Nigel Eccles, the company turned a profit in Q4 of 2013. That quarter the company had $7.4 million in revenue from 192,942 paid actives. In addition, it has it highest amount in payout of $81 million. So if it turned a profit last year in Q4, the question is why would the company sign up for an additional $70 million in funds. According to Eccles, the money will be used for increased marketing and adding to its mobile application.
It also of note that NBC Sports has entered into investing. NBC Sports already runs RotoWorld, a leading content provider for fantasy sports. So the merging of a game provider and content provider could provide an effective competition against ESPN and Yahoo! But it is also good to note that the entrance of Sports Illustrated and USA Today may have guided FanDuel's strategy to go big so that it could compete with these already established brands.
