Sports ecommerce firm Fanatics raises valuation to $18B, plans to expand to online gambling

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-commerce company Fanatics has raised its valuation to $18 billion, raising capital from investors including Major League Baseball, SoftBank and hip-hop mogul Jay-Z to grow sports offerings and ventures including online gambling within its parent umbrella.

The Florida-based firm secured a $325 million money raise, which will allow to focus on revenue streams outside of merchandising, reports Reuters. According to prior reports, the company expects to make $3.4 billion in revenue this year.

The licensed sports merchandise retailer is attempting to leverage its fan base to build a sports commerce powerhouse with operations involving gaming, sports betting and media business.

It is expected that a new division will be led by Fanatics executive chairman Michael Rubin, who will serve as chief executive officer, as current CEO Doug Mack will continue to lead the merchandise business.

“We think we have a structural advantage to building any digital sports business, and online sports betting is no different,” said Michael Rubin, according to Dow Jones.

The company has been hiring new executives under its expansion plan since June, including former IAC chief financial officer Glenn Schiffman and former Los Angeles Dodgers president Tucker Kain, with the expansion plan in mind. FanDuel’s former CEO Matt King is expected to play a key role in the upcoming sports gambling and gaming division.

This latest round marks Fanatics’ third capital raise within a year, with the company almost tripling its valuation from $6.2 billion in August 2020. Moreover, the firm has also recorded continuing online sales growth since the beginning of the pandemic, and counts with a database of 83 million people who have interacted with it, as well as relationships with more than 300 leagues, teams and colleges.

The e-commerce company has also been focusing on other digital sports sectors including not only merchandise and gambling but also ticketing and the NFT marketplace. A nonfungible token company called Candy Digital was launched earlier this year.

The increasing stakes have led to speculation on a forthcoming IPO, although these have been downplayed.

“I think going public is an option for us that we talk about a lot but it’s not something we’re focused on today. We’re focused on building a business. But I think we’re well-financed and have a lot of growth capital to continue to grow,” said Rubin to CNBC last March.