In a venture capital round typically reserved for hot tech startups, fantasy sports company FanDuel has closed on a $70 million round of funding.
The round is about seven times larger than its last capital raise of $11 million in January 2013 and brings the company's total amount raised to $88 million. FanDuel declined to provide a current valuation for the company but claims to have tripled year-over-year revenue and is projecting, according to the investor page of its website, revenue of $40 million this year.
Shamrock Capital Advisors, which originally began as the investment firm for the late Roy Disney, led the round. New investors NBC Sports Ventures and private equity firm KKR also participated, along with existing investors Comcast Ventures and others.
The big-money names attached to the round underscore the rapid growth of FanDuel and its top competitor, Draftstreet, which offers a twist on traditional fantasy sports leagues by allowing users to pick new teams on a daily or weekly basis instead of keeping one team for the entire season. Last year, for instance, Draftstreet secured what its CEO Brian Schwartz described to BuzzFeed as a "large" investment from Barry Diller's IAC.
About 41 million people participated in a fantasy sports league last year, according to the Fantasy Sports Trade Association. Estimates of the industry's size range from $2 billion in the U.S. alone to $4 billion overall. The daily and weekly fantasy sports market, known in industry parlance as "challenge games," is estimated to have generated $492 million in U.S. over the last 12 months, and FanDuel claims to hold a 65% share in that market.
The company, which has partnerships with Yahoo, ESPN, CBS, NBC, and the Orlando Magic, plans to pay out more than $400 million in prizes to players this year and more than $1 billion in 2015.
Mesa Global served as FanDuel's investment bank for this round of financing.