Underdog has announced a new Series C funding round led by Spark Capital that lifts the company’s pre-money valuation to more than $1.2 billion.
The new funding is expected to exceed $100 million and has a first round close of $70 million. The raise values Underdog’s valuation to $1.225 billion, around triple its Series B valuation of $485 million from 2022.
Underdog, which labels itself as the fastest-growing sports gaming company in the U.S., said Spark’s investment underscores market confidence in Underdog’s continued growth and potential.
It marks the sports gaming industry’s largest investment from a top-tier Silicon Valley venture capital firm, said the operator.
The company said the funding will primarily allow it to further invest in creating the best products for sports fans in the U.S. and continuing to bring top-tier talent into the company.
CEO and Founder Jeremy Levine called Spark’s cash injection “a real accelerator” for its plans.
“We’re going to continue to invest in people and product – and as fast as we can,” Levine vowed. “There is so much more to build, and we’re going to keep building.”
Underdog was founded in 2020 and now boasts nearly four million customers nationwide. Per the company, it is the fourth most downloaded sports gaming app in the U.S., combining the sports betting and fantasy sports verticals.
“This investment fits Spark’s philosophy of backing products we love from creators we admire,” said Will Reed, general partner at Spark Capital. “Underdog has proven they can win where it matters most: product. They’ve also shown they can attract top talent from gaming, tech, and sports. Their unwavering focus on product and customer experience is why they’ve emerged as the most innovative player in sports gaming.
“We see massive opportunity ahead and are thrilled to be on the journey with them to make sports more fun.”
Per Axios, Underdog has directly raised $140 million from backers including Mark Cuban, Kevin Durant and more.
Underdog exiting New York, stepping into New Jersey and Delaware
Thew news of the funding and heightened valuation comes amid a shift in Underdog’s operations.
The company is fully exiting New York after reaching an agreement with the New York State Gaming Commission (NYSGC) to pay a roughly $18 million settlement fee.
The fantasy and sports betting operator assumed Synkt Games‘ temporary license in the Empire State when it acquired the company, but the NYSGC determined that Underdog was offering contests that were not permitted under the terms and conditions of the inherited license.
While Underdog will no longer be able to offer its services in New York, it is rolling out its peer-to-peer Champions Pick’em product in neighboring New Jersey and Delaware.
Underdog also offers sports betting in some markets and Levine has publicly declared his intention to enter Missouri when that state launches its online sports wagering market later this year.
