Underdog Raises $35 Million in Funding, Valued at $485 Million

Early Tuesday morning, Underdog Fantasy announced that it had raised $35 million in a Series B round of funding that includes BlackRock and Acies Investment. The recent funding round has the company valued at $485 million, and the leader in fantasy sports is expected to become a major player in the rapidly growing sports betting industry.

Sports Betting Industry’s Rapid Growth

Underdog has stated it intends to expand from fantasy sports to sports betting, which generated $4.3 billion in national revenue last year. Analysts from Eilers & Krejcik Gaming forecast that revenue could reach $20 billion by 2026.

According to the Fantasy Sports and Gaming Association, nearly 70 million people in the U.S. gamble on sports or play fantasy sports – that’s over 20% of the population. Around 60% of that group participate in both fantasy sports and gambling. The number of people gambling on sports is up 20% from last year, and the number of fantasy sports participants is up 14%.

Fantasy Players to Sports Bettors

Underdog founder Jeremy Levine has spoken to his company’s unique position as a “gaming studio in a licensed betting environment,” rather than a “sportsbook company” as the rest of the companies in the sports betting industry view themselves.

“While the typical sportsbook is spending over $500 to acquire a customer, Underdog is bringing in new users for a fraction of that,” added Chris Grove, co-founding partner of Acies Investments. “Underdog’s product is leading to competitive advantages as Underdog’s customer acquisition and retention success is best in class.”

The approach of turning fantasy sports players into sports betting customers has worked for other companies, including DraftKings and FanDuel. They were longtime Daily Fantasy Sports providers before entering the online sports betting market in 2018. Those two companies now boast around 60% of the online sports betting market share in the U.S.

Underdog launched just over two years ago and has quickly become a major competitor in the fantasy sports landscape, with its platform available in every state but nine in addition to Canada. Underdog has acquired valuable users across the country and has launched a $10 million season-long NFL Best Ball tournament, the largest season-long fantasy prize pool ever.

Underdog Partnering with the Cincinnati Reds

cincinnati reds

Underdog is already on track to launch online sports betting in its first market in January. The platform has partnered with the Cincinnati Reds of the MLB for market access in Ohio. Pending the Ohio Casino Control Commission’s license approval, the platform would be able to launch on January 1, 2023, the universal start date for the state.

Underdog is also planning on launching online sports betting in Colorado at some point next year. The company is reportedly planning to hire around 100 more employees in addition to its current workforce of 165, and that’s likely in anticipation of a major expansion into the online sports betting landscape.

Acies Investments has invested in micro-betting and sports betting integrity technology, which will likely come in handy as Underdog continues its expansion efforts and seeks licenses in other states.

Superstar Investors

If you need further proof that Underdog is on its way up in the sports gaming world, look no further than the A-list names that have invested in the platform. BlackRock is the largest asset manager in the world, with $10 trillion in assets under management as of January 2022 and several high-profile accounts.

Along with those notable funds, previous investors of Underdog include high-profile athletes such as Kevin Durant, Trae Young, Odell Beckham Jr., and Matthew Dellavadova; musicians such as The Chainsmokers, Kygo, Steve Aoki, Future, Gunna, and Nas. Harris Blitzer Sports & Entertainment, which owns the New Jersey Devils and Philadelphia 76ers, is also invested.

Underdog has also received investments from big names in the sports gaming space, such as gaming research firm Eilers & Krejcik, Bleacher Report’s Adam Lefoke, the Action Network, FantasyLabs, RotoGrinders, and SimpleBet. Mark Cuban led a $10 million investment round last year that included Breon Corcoran, the former CEO of Paddy Power Betfair, which is now Flutter Entertainment, the parent company of FanDuel.

I've been a huge sports fan for as long as I can remember and I've always loved writing. In 2020, I joined the Lineups team, and I've been producing written and video content on football and basketball ever since. In May 2021, I graduated from the University of Michigan with a degree in sport management. My goal is to tell enthralling stories and provide meaningful insight on the sports I write about while helping you cash some bets along the way.

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