Underdog Fantasy announced a $100 million Series C funding round on Wednesday that values the company at $1.23 billion.
That is more than double Underdog’s previous valuation from a Series B round in 2022.
Spark Capital, which led the round with a $70 million first close, has previously backed consumer tech standouts like Twitter, Slack and Discord. It marks the largest single venture capital investment in sports gaming ever, according to a press release from Underdog.
The company, which calls itself the “only top operator in sports gaming built on its own technology,” intends to use the funding primarily to invest in product.
Underdog secures another key investor
Founded in 2020, the Brooklyn-based Underdog has now raised over $140 million from the likes of BlackRock, SV Angel, Mark Cuban and Kevin Durant. It is the fourth-most downloaded sports gaming app in the US and offers various fantasy sports products in 41 states, tweaking them over the past few years as regulations dictated.
“This investment fits Spark’s philosophy of backing products we love from creators we admire,” Will Reed, general partner at Spark Capital, said in a statement. “Underdog has proven they can win where it matters most: product. They’ve also shown they can attract top talent from gaming, tech, and sports. Their unwavering focus on product and customer experience is why they’ve emerged as the most innovative player in sports gaming. We see massive opportunity ahead and are thrilled to be on the journey with them to make sports more fun.”
Underdog exists, expands
The company recently pulled out of one of its largest markets in New York after agreeing to a $17.5 million settlement based on revenue it generated from daily fantasy sports contests deemed outside the scope of its temporary license. It has since launched its popular pick’em product in New Jersey and Delaware under a peer-to-peer model, a shift that came after working with more than a dozen states that took issue with its original player vs. house model resembling sports betting.
It launched its first sportsbook in North Carolina last year, though early returns suggest it has yet to compete with top-tier sports betting operators. Underdog is expected to be one of several suitors to apply for a Missouri sports betting license ahead of the state’s expected launch this fall.
“Spark’s investment is a real accelerator,” Underdog CEO and founder Jeremy Levine said in a statement. “We’re going to continue to invest in people and product — and as fast as we can. There is so much more to build, and we’re going to keep building.”
