New York-based fantasy sports operator Fanduel, Inc. on Tuesday said it has brought in $275 million after closing a round of financing, bringing the company’s total capital to $363 million.
The company, which received investments from Google Capital and Time Warner in the oversubscribed round led by KKR, said it plans to use the financing to acquire new customers, introduce new products and build out its management team.
Several NFL and NBA team owners also participated in the financing round, along with investors who have contributed in the past, including Shamrock Capital, NBA Sports Ventures, Comcast Venstures, Bullpen Capital, Pentech Ventures and Piton Capital, FanDuel said.
The round of financing closes as FanDuel continues to grow, expanding its active user base by 300 percent since this time last year, the company said.
FanDuel recently hired over 40 developers in its Orlando, Florida, office who are focusing on sports and mobile gaming.
The company also recently finalized exclusive, multiyear partnerships with 13 NBA teams and 16 NFL teams, giving the company access to a range of the teams’ marketing assets.
FanDuel, founded in 2009, is currently the official partner of the NBA, and has offices in Los Angeles and Orlando and the Scottish cities Edinburgh and Glasgow.
The company is part of a growing market for daily fantasy sports, with FanDuel vying against competitors like DraftKings, Inc. and Yahoo Inc.
Last week, Yahoo said it will offer a new daily fantasy sports online game in which users will compete for cash prizes.
The platform builds on Yahoo’s existing seasonlong fantasy sports games, in which users select teams of professional athletes scoring points based on the statistical performance of those players in a given week, and can be accessed through an update on the computer or through a new app that will be available on the iPhone, according to the company.
Daily fantasy sports, or DFS, differs from traditional season-long fantasy sports in that it allows users, who pay a fee, to build teams of fantasy players for shorter periods than full-season leagues with winners earning cash prizes. The company makes a profit by taking a cut of the cash pooled in these fantasy competitions.
DFS games fall into an exception to the Unlawful Internet Gambling Enforcement Act that makes fantasy sports legal where “winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals” and the outcome is not based “on the score, point-spread, or any performance or performances of any single real-world team or combination of such teams.”
But shorter-duration games and new styles of gameplay factoring in such things as point spreads are blurring the line.
DraftKings and FanDuel maintain they are 100 percent legal and have already reached deals with major professional sports leagues and sports media companies.