Underdog Tops $1B Valuation After Series C Funding Round
Underdog secured a historic $70 million Series C funding round led by Spark Capital, positioning it as the largest investment from a prestigious Silicon Valley venture capital firm in the sports gaming sector.
On March 26th, Underdog unveiled this significant funding achievement, marking its first-ever valuation of $1 billion, now elevated to $1.2 billion (£927.4 million/€1.1 billion). This represents a nearly threefold increase from its valuation just three years prior, a reflection of the brand’s rapid growth and potential within the competitive landscape of online sports gaming.
“This investment aligns perfectly with Spark’s philosophy of supporting products we genuinely admire from visionary creators,” stated Will Reed, General Partner at Spark Capital. “Underdog has not only demonstrated its ability to deliver exceptional products but has also managed to attract top talent across the gaming, technology, and sports industries.”
Accelerating Growth in Sports Betting
This announcement arrives approximately one year after Underdog launched its legal sports betting platform in North Carolina—an important milestone as it marked the company’s first offering of legal sports betting within a U.S. jurisdiction. This strategic entry coincided with the highly publicized NCAA tournament’s Sweet 16 round, showcasing the company’s commitment to leveraging key sports events for maximum engagement.
Despite this impressive valuation, CEO Jeremy Levine remains focused on continuous growth. He emphasized that the current funding round could potentially exceed $100 million, illustrating the company’s ambition to scale operations rapidly.
“Spark’s investment acts as a true accelerator for us,” Levine communicated in the press release. “Our focus will remain on enhancing our team and our products at an aggressive pace. There is an abundance of potential to explore, and we’re determined to capitalize on it.”
Navigating Regulatory Challenges in New York
Beyond North Carolina, Underdog offers its fantasy sports pick ‘em products across several states, including California, Texas, and Washington D.C. However, the brand’s operations in New York faced significant hurdles. Following its launch in December 2022, Underdog Fantasy was recently required to withdraw its offerings after the New York State Gaming Commission (NYSGC) ruled that the company had operated unlawfully.
In response, Underdog agreed to pay a $17.5 million fine while asserting no admission of wrongdoing. The settlement indicated that Underdog had operated under a good faith assumption regarding its compliance with the state’s regulations.
Significant Growth Since Series B Funding
Underdog previously raised $35 million in a Series B funding round in 2022, achieving a valuation of $485 million. This round included support from prominent funds and accounts managed by BlackRock and Acies Investment, alongside notable investors like Mark Cuban, Kevin Durant, and Trae Young.
At that time, Chris Grove from Acies highlighted that typical sportsbooks averaged around $500 in customer acquisition costs. In contrast, Underdog managed to secure customers at a fraction of that cost, thanks to its exemplary acquisition and retention strategies. His praise for Underdog’s innovative products emphasized the company’s commitment to enhancing customer experience and solidifying its competitive edge in a crowded marketplace.
Three years later, Will Reed from Spark Capital echoed Grove’s insights, noting that Underdog’s relentless dedication to product and customer satisfaction positions it as a leading innovator within the sports gaming sector.
