Daily fantasy sports sites are rapidly gaining popularity and investors are lining up to back the few industry leaders.
FanDuel is the latest platform to cash in, announcing Tuesday it closed a $275 million Series E financing round. The funding is led by private equity firm KKR (KKR) along with Google’s (GOOG) growth equity arm as well as Time Warner (TWX) properties Time Warner Investments and Turner Sports. The Wall Street Journal, citing unnamed sources, reports that FanDuel’s latest funding round gives the six-year-old company a valuation of nearly $1.3 billion.
Coins2Dayreported in February that FanDuel was considering a fundraising round that would value the company at more than $1 billion.
FanDuel is part of a growing segment of daily fantasy sports sites that allow users to legally wager money on the outcomes of professional and collegiate sporting events. The companies typically generate revenue by collecting tiny percentages of users’ entrance fees for the daily contests.
In the press release announcing its latest funding round, FanDuel claimed its base of paid active users has tripled over the past year. It said the influx of cash will go toward new products and boosting user growth. FanDuel now has raised $363 million in capital to date.
“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,” FanDuel CEO and cofounder Nigel Eccles said in a statement.
The company also notes that the funding round included the participation of “a number of NFL and NBA team owners” as well as previous FanDuel investors, a list that includes Shamrock Capital, NBC Sports Ventures, Comcast Ventures, Bullpen Capital, Pentech Ventures, and Piton Capital.
Meanwhile, FanDuel is not the only potential tech “unicorn” to come out of the massive fantasy sports industry. Rival daily sports betting site DraftKings has raised $126 million to date; it’s still working on an open funding round that could value the company north of $1 billion, according to WSJ. Earlier this year, Walt Disney (DIS) was reportedly in talks to join the open DraftKings round, but that investment never came. Instead, Disney property ESPN signed a marketing deal making DraftKings the cable sports network’s official daily fantasy sports service.
A recent entrant into the daily fantasy sports space is Yahoo (YHOO), which has updated its fantasy-sports app to allow users to bet money on a daily or weekly basis.