(Corrects to say that Shamrock Capital is the investment arm of
Roy E. Disney's family)
* Funding round led by Shamrock Capital
* Private equity firm KKR is new investor
* FanDuel could look at IPO in next two or three years-CEO
By Liana B. Baker
NEW YORK, Sept 2 - FanDuel, a startup that runs real-money
fantasy sports leagues, said Tuesday it has raised $70 million
in a funding round led by Shamrock Capital that also includes
private equity firm KKR and NBC Sports.
The company creates one-day tournaments for fantasy sports
and expects to pay out $400 million in prizes this year. The
valuation of the company after this funding round was not
disclosed and neither was the amount that each investor
NBC Sports is a division of NBCUniversal, a unit of Comcast
Investors have been looking for new ways to capitalize on
the rising value of live sports. FanDuel's latest move expands
its previous total funding of $18 million by a wide margin. One
of FanDuel's rivals, DraftKings raised $41 million in a funding
round in late August.
FanDuel's Chief Executive Officer Nigel Eccles said in an
interview that the company turned profitable in the fourth
quarter of last year. It generates revenue by keeping a cut of
the entry fees fans pay to compete.
Online fantasy sports that involves real money are not
viewed by regulators as gambling since fantasy sports are
considered to be games of skill that involve knowledge of
professional athletes and statistics.
Eccles said FanDuel will use the funds to invest more in the
mobile version of the product and also increase spending on
While some sources close to the deal told Reuters that
FanDuel could one day be an acquisition target for a media
company, Eccles said he would like the company to remain
independent and he could see FanDuel pursuing an initial public
"We would look at an IPO in two or three years," he said.
While season-long fantasy sports have been around for years
they are dominated by companies such as ESPN, CBS and Yahoo
FanDuel, meanwhile, is focused on contests that last one
day. These term contests have the potential to spur a
fan-following for late-season games in various sports that have
no playoff consequences.
"The one day fantasy market has been very fast growing. It's
right on the cusp of becoming mainstream," said Michael Lasalle,
a partner at Shamrock who will join FanDuel's board.
Shamrock Capital, which sold the Harlem Globetrotters last
year, is the private equity firm that started as the investment
arm of the family of Roy E. Disney, the son of Walt Disney's
Previous investors in FanDuel that also participated in the
round are Comcast's venture capital arm, Comcast Ventures,
Pentech Ventures, Bullpen Capital, Scottish Enterprise and
Eccles said he was pleased that he can count large private
equity firm KKR as a new backer for the company he co-founded.
"Typically KKR focuses on much bigger companies but they
approached us and we met them and liked the team. It's always
good to have a very deep-pocketed investor supporting the
company," he said.
(Reporting by Liana B. Baker)