Fantasy company Underdog is planning a move into the world of online sports betting after closing a multimillion-dollar fundraising round that will provide it with further financial firepower.
Underdog announced on Tuesday a Series B funding round that totals $35 million and values the Brooklyn-based company at $485 million. The round's participants included Acies Investment and funds and accounts managed by BlackRock Inc., the world’s largest asset manager, who joined existing investors such as Mark Cuban and Kevin Durant.
According to a press release, Underdog “plans to build innovative licensed sports betting products” over the next year, in addition to hiring more than 100 new employees and continuing to find new ways of offering daily fantasy contests.
“We’re excited to continue to innovate and build new experiences from the ground up in fantasy, sports betting, and adjacent spaces,” said Jeremy Levine, president and chairman of Underdog, in a press release. “This funding round gives us the fire power to continue to build, and build we will.”
A tried-and-tested path
Underdog has already got the ball rolling with respect to its sports-wagering ambitions.
The company has applied for a license that could allow it to conduct online sports betting in Ohio on behalf of the Cincinnati Reds. Underdog plans on launching a sportsbook in Colorado next year as well, the Wall Street Journal reported on Tuesday.
In striking out into sports betting, Underdog is following in the footsteps of fellow DFS companies DraftKings Inc. and FanDuel Group, which started as fantasy operators before adding point spread and moneyline wagering to their repertoire. DraftKings and FanDuel now operate two of the largest legal sportsbooks in the United States.
Levine told the Wall Street Journal that the company has acquired more and more customers by creating unique games. For instance, Underdog recently launched a $10-million “best ball” tournament for the upcoming NFL season, “which is the largest season-long fantasy prize pool ever,” the company said.
It now looks like Underdog will attempt to bring that sort of innovation to the world of sports betting. According to the Journal, Underdog “will offer traditional sports wagering and build new offerings in areas like betting during live games.”
