Underdog Fantasy Plans Sports Betting Launch After Firm’s Value Upped to $485m

  • The world’s largest asset manager BlackRock led Underdog’s $35m Series B funding
  • Underdog has now applied for mobile sports betting licenses in Colorado and Ohio
  • It asserts that its customer acquisition cost is a fraction of what other sportsbooks pony up
  • Levine said the fresh funding round gives Underdog “the firepower to continue to build”
Money falling from sky
DFS start-up Underdog has more firepower to enter the US mobile sports betting market after securing $35m in Series B funding. [Image: Shutterstock.com]

Firm’s value soars

The value of New York-based daily fantasy sports (DFS) firm Underdog Fantasy has grown to $485m after a second fundraising round raised $45m.

fund injection led by one of the world’s largest asset managers

The DFS firm announced its Series B funding windfall on Tuesday. Underdog’s head of content strategy and production, Josh Norris, took to Twitter to announce the fund injection led by one of the world’s largest asset managers NYC-based BlackRock:

Also involved in the $35m funding was Acies Investment, a California-headquartered sports betting, iGaming and eSports venture capital firm. Acies co-founding partner Chris Gove said that Underdog’s “unique focus on product and experience will reshape the industry” as the DFS firm plans a move into licensed sports betting, starting with Ohio and Colorado in 2023.

Sports betting buzz

À la FanDuel and DraftKings, Underdog’s aim is to expand from DFS to mobile sports betting. It has already successfully applied for a sports wagering license in the active Colorado market as well as Ohio, which is set to launch January 1, 2023. According to the Wall Street Journal, Underdog is on “an aggressive hiring spree” to attract over 100 new employees as it seeks to build licensed sports wagering products.

In a news release Tuesday, Gove underscored why Underdog is so appealing to investors within the US sports wagering industry. “While the typical sportsbook is spending over $500 to acquire a customer, Underdog is bringing in new users for a fraction of that,” he commented.

Since launching in 2020 with its first gaming product, Underdog has already attracted high-profile backers, from US sports stars such as Odell Beckham Jr and Kevin Durant to rappers Nas and Future, along with DJ Steve Aoki. Industry investors include ex-Paddy Power Betfair CEO Breon Corcoran, billionaire Mark Cuban, Zynga founder Mark Pincus, and boutique research company Eilers & Krejcik Gaming.

Underdog on the up

After Tuesday’s funding, Underdog’s president and chair Jeremy Levine said that ever since its 2020 launch, the DFS firm has believed that:

building quality products and putting customers first is a winning recipe.”

Levine added that the fresh funding round gives Underdog “the firepower to continue to build and build we will.”

He also said his firm was “thrilled” that funds and accounts managed by fellow NYC entity BlackRock are taking part in its second fundraising round as Underdog continues to pursue its vision.