DraftKings has closed $150M in new funding this morning, the company confirmed to TechCrunch.
The round was led by Washington D.C-based Revolution Capital, the venture firm helmed by AOL founder Steve Case and Washington Capitals and Wizards owner Ted Leonsis. As part of the deal, Revolution Growth’s Steve Murray will be joining DraftKings’ board.
DraftKings hasn’t said how it will use the funding, but the upcoming NFL season is when the company spends a majority of its advertising budget, which was $156M on TV ads alone last year. Plus, the company isn’t yet through with its legislative battle, and presumably still is spending a good portion of funds on legal bills.
Having an NBA and NHL team owner on the cap table (existing investors include Robert Kraft and the MLB) is sure to help the company maintain good relationships with professional leagues. In a statement DraftKings’ CEO Jason Robins alluded to this, saying that the firm has deep expertise in “sports, technology, and policy”.
Because of the way DraftKings advertises in professional sports arenas, these teams and leagues have become an essential part of the company’s success.
While DraftKings isn’t officially associated with any professional leagues, the nature of the game would make it hard for the company and industry to thrive if teams and leagues weren’t on board. For example, the NCAA wasn’t happy about the way DraftKings and FanDuel were using student athlete’s names, and forced both companies to suspend all NCAA contests indefinitely.
While neither the company or firm disclosed valuation, many have said it was lower than the $2B post-money valuation that DraftKings received last summer. This makes sense, as the last 12 months has been particularly tumultuous for the company, as it has had to fight dozens of state legislatures and courts to get daily fantasy sports legalized in each state. At one point when DraftKings’ legal situation in NY was looking particularly gloomy there was even a rumor that DraftKings would have to merge with FanDuel, its biggest competitor, to stay afloat.
We’re talking to DraftKings CEO Jason Robins at Disrupt SF in less than 2 weeks, where we’ll definitely discuss this latest round of funding and how the company plans to use it to continue their exponential growth.