A TECHNOLOGY company set up by a group of graduates and entrepreneurs five years ago is aiming to double its global headcount to more than 200 after raising $70 million (£43m) in a venture capital funding round.
Edinburgh-based fantasy football firm Fanduel has just launched a mobile app and is updating its software to enhance its “one-day gaming” system that is due to pay out $400m in prizes this year.
Co-founder and chief executive Nigel Eccles said the company, which has concentrated on American sports and makes almost all its sales in the US, turned profitable in the fourth quarter of last year. It generates revenue by keeping a cut of the entry fees fans pay to compete, and has grown rapidly in the US since its launch in 2009.
Eccles said the company’s mobile platform was proving “tremendously successful” and is already one of the top five US sports apps being downloaded – but it needed more investment because fantasy sports are “incredibly challenging applications to develop” due to the huge spikes in demand when matches start.
The firm’s 50-strong software engineering team is based in Edinburgh’s TechCube but is due to move to new offices in Quartermile in the coming months.
“We are going to very significantly ramp up the team and invest a lot more in building up that product, and additionally the web product,” Eccles said. “We expect by this time next year we would have doubled our team size [in Edinburgh] to about 100.”
Engineers will also be working to improve both the “front-end experience” and the financial infrastructure needed to take millions of dollars of deposits every day. Before the app was launched, Fanduel relied on a “mobile optimised” site as half its usage was already coming from phones.
The firm’s sales and marketing team, which is based in New York, will also double as part of the expansion, taking its staffing to about 100. One-day live fantasy gaming extravaganzas in Las Vegas and Los Angeles are proving another avenue of growth for the business, which developed as an offshoot of Hubdub, a political forecasting game.
Hubdub was set up in 2008 by a team including four graduates of Edinburgh and St Andrews universities. The five co-founders met at Edinburgh Entrepreneurship Club, appropriately during an event from its Silicon Valley Speaker series featuring Craiglist chief executive Jim Buckmaster.
Hubdub was later abandoned in favour of its faster-growing offshoot and Eccles left his job as business development manager at Scotland on Sunday owner Johnston Press to lead the firm.
Fanduel concentrated on US sports such as American football, which are ideal for the fantasy format because player statistics are a huge part of the fan experience.
However, Eccles said expansion into Europe was “on the road map”. “We don’t have a timetable yet but there’s definitely a lot of interest to launch something in the UK and Europe,” he said.
The latest funding round was led by Shamrock Capital and included private equity firm KKR and NBC Sports.
No valuation was released, but Fanduel’s worth may soon be known as Eccles has said he would like to pursue a flotation in as little as two years’ time.