On Thursday, DraftKings announced its new cash infusion but declined to specify at what price point the new investors had bought in. The Boston Globe reported that the financing valued DraftKings at around $1b, around half the price the company was believed to be worth prior to last year’s spectacular DFS meltdown.
Among the new investors is Revolution Growth, a venture capital firm led by Ted Leonsis (pictured), who owns both the NBA’s Washington Wizards and the NHL’s Washington Capitals. Leonsis has previously supported calls to end the federal ban on real sports betting and holds a major stake in sports data providers Sportradar AG, whose clients include major international bookmakers.
DraftKings CEO Jason Robins issued a statement welcoming his new backers while claiming that the latest funding round was “oversubscribed.” Robins singled out Revolution Growth as “a tremendous new partner” that has “deep expertise in sports, technology and policy.” Revolution partner Steve Murray has been given a seat on DraftKings’ board of directors.
DraftKings’ rival FanDuel is hotly tipped to be next to announce its own new funding round. Both companies are gearing up for the arrival of a new National Football League season, which is the DFS industry’s chief revenue vehicle.
However, this latest cash injection is unlikely to fuel another advertising blitz on the scale of last year’s campaign for DFS hearts and minds. Neither DraftKings nor FanDuel is believed to be profitable, and the companies’ legal and lobbying bills have skyrocketed since state attorneys general began cracking down on unfettered DFS activity.