DraftKings doesn’t do anything quietly. And yet according to reports late last week, the Daily Fantasy juggernaut managed to raise another $200 million without much fanfare this past summer, all coming in the latest round of funding that was just closed before the DFS backlash—from the media, and more importantly the United States government—began.
DraftKings Inc. raised around $200 million this summer in a previously undisclosed investment that valued the fantasy sports startup at about $2 billion, a person with knowledge of the company’s finances said Friday.
The latest round of investment means the Boston-based fantasy sports operator was able to raise a half-billion dollars in a matter of weeks as it prepared to buy enormous amounts of airtime for the start of the NFL season. In late July DraftKings announced a $300 million round led by Fox Sports.
DraftKings had just raised $300 million in a fundraising round led by Fox Sports and then went out and raised another $200 more at a higher valuation. It’s incredible, really, and it makes one wonder, how did those conversations go?
“What do you need the money for?”
“Buying more ads.”
“You mean those ads everyone hates? Those ads that turned the media against you? Those ads that put your company, and the industry as a whole, in such a huge spotlight that the government is coming after you, leading to public backlash and potential ruin?”
“Yep. Those ads.”
“Cool. We’re in.”
In truth, even with the crackdown by the government in the United States, daily fantasy sites have shown little sign of slowing down. While the fate of DFS in America may be mirroring online poker, so too has the industry’s expansion. From the Globe story by Curt Woodward:
DraftKings has used much of its new funds to buy a flood of commercials during the NFL season. It is also preparing to launch overseas for the first time, which could dramatically increase the amount of money flowing through its contests. It recently obtained a license from the United Kingdom’s Gambling Commission, and chief executive Jason Robins this week said DraftKings expects to begin offering contests there later in November.
With that, DraftKings is again following somewhat in the footsteps of DFS rival FanDuel, which is based in Edinburgh, Scotland despite most of its user base playing games in the United States. While FanDuel’s website touts that “the birth of Daily Fantasy, as we know it” was originally conceived as “a backyard Texas brainstorm between 5 co-founders” the site fails to mention that the five co-founders are from Scotland, Wales, England and Northern Ireland. Global expansion isn’t just expected in daily fantasy, it’s a wonder what’s been taking them so long.
While the United States is held up in never-ending legal battles to determine how, where and why we can gamble away our money on sports, the rest of universe enjoys far less draconian regulations when it comes to winning and losing (mostly losing) their money. So while the DFS industry has been under enormous scrutiny the last few weeks in America—coincidentally just after that half a billion dollars DraftKings pulled in through two rounds of funding—the rest of the world seems wide open for growth.
Fan of world football? Fan of cricket? Enjoy the flood of daily fantasy ads. They’re coming soon. And they probably won’t stop. Ever.