Daily fantasy sports and sports betting company DraftKings appears close to a new infusion of cash.
According to a source familiar with DraftKings’ position, the company will likely soon have the $200 million it had been seeking. The funding, if completed, would give DraftKings a pre-money valuation of $1.5 billion.
The source of the funding is not known.
Reports of DraftKings working on a new round of funding date back to June. The $1.5 billion valuation is what it had been seeking earlier this summer.
DraftKings needed to raise money
It has been widely assumed that DraftKings would need to raise money heading into a crucial time.
Not only is it fantasy football season — the busiest months for DFS revenue — it’s also in the middle of its sports betting rollout. It was the first operator to market in online New Jersey sports betting, launching DraftKings Sportsbook last month.
DraftKings Sportsbook growth
DraftKings has designs on getting into more sports betting markets, as well. That includes West Virginia, where it has applied to do business in the about-to-launch WV sports betting industry. It has a deal in place for New York sports betting as well, and is likely eyeing an entry point in Pennsylvania sports betting.
The new money and valuation are certainly predicated on DraftKings’ ability to expand into new states for sports gambling.
In sports betting, DraftKings has to compete against a wider array of companies, both foreign and domestic, than it had to deal with previously. It must also compete with a resurgent FanDuel, which was recently acquired by Paddy Power Betfair. FanDuel Sportsbook could be days away from launching online in New Jersey, as well.
DraftKings is also starting a new office in San Francisco and is planning on adding hundreds to its payroll.
This new infusion of cash should help DraftKings meet some of the above goals.