New Funding For Daily Fantasy Sports Site Apparently Meant To Bridge Gap To Merger With FanDuel
Legal Sports Report

DraftKings Closes New Investment Round, Reportedly In Excess Of $100 Million

DraftKings funding round
Daily fantasy sports site DraftKings confirmed that it closed a new investment round, reportedly raising more than $100 million, according to Bloomberg News.

The DraftKings round, at a glance

The news — and the amount of the round, was broken by Bloomberg:

DraftKings quickly confirmed the report, offering this statement from CEO Jason Robins:

“We have closed a Series E1 round of funding led by Eldridge Industries.  As DraftKings continues to grow and pioneer new ways for sports fans around the world to engage with the teams and players they love, we were looking for a funding partner who could bring additional depth to the table.

The exceptional team at Eldridge does that through their incredible knowledge and success with media properties, providing a deep bench of experts to help fuel DraftKings’ continuing growth as a sports entertainment company.”

More about the investment firm

Here’s how Eldridge Industries describes itself:

Eldridge Industries owns, operates and invests in businesses across industries including finance, media and real estate.  Headquartered in Greenwich, CT, with offices in New York, London and Beverly Hills.

Its chairman and CEO Todd Boehly, who is an owner of the Los Angeles Dodgers. He’s had an ownership stake in the Dodgers since 2012.

Major League Baseball was an early backer of DFS, and owns equity in DraftKings. DraftKings has sponsorship deals with almost every MLB team, including the Dodgers.

What about the DraftKings-FanDuel merger?

What’s this mean for the merger with FanDuel? The deal between the two largest DFS operators is almost certainly still on.

However, the reality is that merger won’t go through until Q3 of this year — per estimates from the two companies — which is still months away. If it drags into the later months of the third quarter, that generates a lot of uncertainty for the two firms.

There’s at least a possibility the merger won’t go through because of federal anti-trust concerns.

LSR is aware that FanDuel has also been trying to raise in recent months.

Lots of investment in DraftKings

It’s the latest in a series of reported investments totaling more than $800 million in the DFS site since it went live in 2012.

This is the second straight round led by a group with ties to an owner in a US sports franchise.

The latest known influx of money for DraftKings was $150 million from Revolution Growth in September of 2016. Revolution was co-founded by Ted Leonsis, the majority owner in the Washington Wizards of the NBA and the Washington Capitals of the NHL.

DraftKings famously raised $300 million before the 2015 NFL season.

DraftKings was once valued at $2 billion, but after the more recent investment, at least one analyst estimated that it had dropped closer to $1 billion.

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Dustin Gouker
- Dustin Gouker has been a sports journalist for more than 15 years, working as a reporter, editor and designer -- including stops at The Washington Post and the D.C. Examiner.