FanDuel taps investors for £7m as it ramps up products and headcount

FanDuel founders Lesley and Nick Eccles
FanDuel founders Lesley and Nick Eccles
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A SCOTTISH “fantasy sports” game company has secured a bumper $11 million (£7m) funding package to expand its product range and talent pool.

Edinburgh-based FanDuel raised its latest round of financing from a consortium of investors which, for the first time, includes the backing of one of the big three US commercial cable television networks.

The company confirmed that Comcast Ventures, whose parent company is a majority owner of the NBC network, has backed it as it launches a drive to hire talent, including programmers and developers in both Edinburgh and New York.

Existing investors that joined the fundraising are Bullpen Capital, Pentech Ventures, Piton Capital, as well as serial investor Richard Koch – the management consultant who popularised the “80/20 rule”, otherwise known as the Pareto principle. To date, the company has raised around $18m from investors.

Andrew Cleland, a partner at Comcast Ventures, has joined FanDuel’s board. He said: “FanDuel has done an exceptional job in establishing itself as the leading player in the next generation of fantasy sports. We see a clear opportunity to introduce the game to a broader set of sports fans and I’m excited to begin working with the company.”

Although the company, which changed its name from HubDub, is based in Scotland, its main business is located in the US. It is one of a handful of firms that offer an online fantasy sports game that completes in one day, rather than over the duration of an entire sporting season.

Users pay an entry fee – ranging from $1 to more than $500 – which funds a cash prize for the winner. As it is classed as a game of skill rather than chance, it is exempt from onerous US gambling prohibitions.

FanDuel said it paid out $50m in league winnings last year, up from $10m in the previous year. Players establish competitions using statistics from league matches in a range of sports including American football, baseball, basketball and ice hockey.

Nigel Eccles, FanDuel’s co-founder and chief executive, said: “Raising this additional funding will allow us to continue to innovate our daily fantasy sports product and considerably expand our user base.”

Fellow founder and marketing director Lesley Eccles said: “We are constantly on the look out for good technical/developer talent in Scotland to build up our team here. Our team in Edinburgh is growing at a remarkable rate.”

Meanwhile, Japanese video game maker Nintendo has predicted a second successive year of operating losses amid slowing sales of its latest console.

The Kyoto-based company, best known for its Super Mario character, expects to sell four million Wii U game consoles by the end of March, down from a previous forecast of 5.5 million when the machine launched in November.

President Satoru Iwata said: “The sales of Wii U were smooth at the beginning but since the turn of the year they have been losing momentum.”

Nintendo surprised investors by forecasting a loss of about £139m for the year to 31 March, having previously predicted a profit. The group sank to a deficit last year because of price cuts for its handheld 3DS device, which has racked up sales of almost 30 million units.