Fanatics Valued at $18 Billion as Jay-Z, Boehly’s Eldridge Invest

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Fanatics was valued at $18 billion, triple the company’s valuation from just last year, in a new funding round aimed at diversifying its business beyond licensed sports merchandise.

Michael Rubin’s company has raised $325 million from a group of new and existing investors, according to people familiar with the plans. New investors include Todd Boehly’s Eldridge, rapper Jay-Z, and separately, Roc Nation. Existing investors in the round include SoftBank and Silver Lake.

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Fanatics, which is on pace for a record $3.4 billion in revenue this year, has teased this expansion recently with a series of big executive hires. The company was valued at $6.2 billion in an August 2020 funding round, then $12.8 billion in another raise earlier this year.

A Fanatics spokesman confirmed the investors but declined to comment on the valuation or the total raised.

The world’s largest seller of licensed sports merchandise is looking to leverage its technology, its database of more than 80 million fans and its relationships with more than 300 leagues, teams and colleges to grow business in new verticals. They includes a recently launched NFT company, sports betting ambitions and possibly media and/or ticketing. (On Monday the New York State Gaming Commission released a list of mobile gaming applicants that included "Fanatics Sportsbook.")

As part of the plan, Fanatics is reshaping its business. Rubin will become the CEO of Fanatics overall, with new hire Tucker Kain, a former Los Angeles Dodgers executive, serving as chief strategy and growth officer, according to the company. Doug Mack will remain CEO of the commerce business and will add the role of vice chairman. Glenn Schiffman, who joined the company earlier this month after serving as CFO of IAC, will be CFO of the whole venture. Former FanDuel CEO Matt King, another relatively new hire, will work with Rubin on building out some of those new businesses.

This new round strengthens the business ties between Fanatics and the Dodgers. In addition to hiring Kain, who was responsible for the MLB team’s off-field business enterprise, two new investors are backed by Dodgers owners. Boehly is Eldridge’s chairman and CEO, and Mark Walter’s TWG Sports Media & Entertainment is also investing in this round.

Insight Partners and MLB are the other prior investors adding more capital. Fanatics’ endgame remains an IPO, though it’s unclear exactly when that might happen.

Fanatics has been opportunistic during the pandemic, not just in its hiring and fundraising. The company bolstered its headwear manufacturing capabilities through a purchase of assets from Vetta Brands, and gained hardgoods manufacturing capability through an acquisition of WinCraft. Fanatics also upped its presence on college campuses in a deal with Barnes & Noble Education, and formed a 50-50 joint venture with Hillhouse Capital to fuel its expansion into China.

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