Edinburgh’s FanDuel reaches $1bn valuation

FanDuel, the daily fantasy sports site, has announced it has raised $275m in Series E financing, bringing the total capital raised to $363m and valuing the company at more than $1bn.

The latest funding comes from private equity firm KKR, Google Capital, Time Warner Investments and Turner Sports.

FanDuel, founded in Edinburgh and now headquartered in New York, continues to grow rapidly with paid active users increasing 300% over the same period last year.

The financing will be used to increase customer numbers in the US and Canada, introduce new features and products and strengthen the management team.

“Having partners like KKR, Google Capital and Time Warner/Turner Sports invest in FanDuel underscores the way this company is transforming sports entertainment,” said Nigel Eccles, co-founder and chief exective.

“This roster of investors, with expertise across finance, technology, advertising and sports entertainment, is committed to the growth and success of FanDuel as a game-changer for the sports industry.”

The investment follows FanDuel hiring 40 developers based in Orlando, Florida focused on sports and mobile gaming.

The company has also finalised exclusive, multiyear partnerships with 13 NBA teams and 16 NFL teams.

As well as its New York HQ, Edinburgh base and new office in Orlando, FanDuel is also located in Los Angeles and recently announced it would be opening an office in Glasgow.

According to Eilers Research, a research firm which focuses on interactive gaming and technology, FanDuel had 1.01m users by the end of last year, each of whom spent an average of $147 a month, reported The Financial Times.

“The cost of acquiring users last year was $70 [each] and they are worth many multiples of that. And investors can see the vision of making sport more exciting, how we are developing excitement,” Eccles told the paper.

By 2020, according to Eilers, the market for fantasy sports in the US could exceed $14bn.

DraftKings, Fan Duel’s main rival, has agreed a deal with Disney to appear exclusively in all ESPN television and digital sports broadcasts, offering players millions of dollars in prizes if they win daily sports leagues.

Yahoo also announced that it would enter the daily fantasy sport market.