FANDUEL, the Scottish-founded sports entertainment business, yesterday said it had closed a bumper $275 million (£176m) funding round backed by big-name US investors including Google Capital and Time Warner.
The move, which is thought to have put a value of well over $1 billion on the company, underlines the remarkable rise of the business since it was founded just over five years ago by a group of entrepreneurs and graduates.
The oversubscribed financing round, which was led by US venture capital giant KKR, brings the total capital raised by the company to $363m and will be used to accelerate its growth.
FanDuel charges players to compete in fantasy leagues across the NFL, NBA, NHL and other US sports.
A number of NFL and NBA team owners also participated in the funding round along with previous investors including Edinburgh-based Pentech Ventures.
The financing will be used to grow customer numbers across the US and Canada, develop new products and strengthen its management team. FanDuel said its paid active user numbers in the US have risen by 300 per cent in the last year and that it now has more than a million paying users.
Nigel Eccles, a former group business development manager at Johnston Press in Edinburgh who co-founded the company, said: “Having partners like KKR, Google Capital and Time Warner/Turner Sports invest in FanDuel underscores the way this company is transforming the sports entertainment industry.
“This roster of investors, with expertise across finance, technology, advertising and sports entertainment, is committed to the growth and success of FanDuel as a game-changer for the sports industry.”
Eccles is chief executive of the firm and his wife Lesley, who he met in 1995 when they were students at St Andrews University, is executive vice-president. Originally known as Hubdub, the start-up was supported by the School of Informatics at Edinburgh University.
Ted Oberwager of KKR, said FanDuel was poised to become the “top sports entertainment platform for fans around the world”.
“We are thrilled to support FanDuel’s next phase of growth given the company’s leading position in the daily fantasy market, model operating principles, highly efficient customer acquisition capabilities, and visionary management team,” he said.
FanDuel has become the second Scottish tech business of late to be valued at more than $1bn following Edinburgh-based travel search firm SkyScanner which was named as Scotland’s first internet company to achieve such a price tag last year.
FanDue employs some 225 staff in Edinburgh and the US and has said it sees the potential for its headcount to double as it looks to recruit more software engineers.
Last month the company secured 8,450sq ft of space on the fifth floor of the new 2 West Regent Street building in Glasgow for new offices.
In May it had recruited 40 staff from gaming company Zynga in the US. That move has seen it set up a new Orlando office, adding to existing US operations in New York and Los Angeles, where the staff from Zynga will be based.
Eccles has previously talked about his ambitions for an initial public offering of the company.
Industry estimates suggest the market for online fantasy sports games in the US could top $14bn by 2020. One in three men over the age of 15 is said to play some form of fantasy sports online in the US.