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Underdog Fantasy, a Brooklyn-based Daily Fantasy Sports site, has raised $70 million in Series C funding at a $1.23 billion valuation from Spark Capital.
Axios first reported on the first close of a round that could total more than $100 million.
Why it matters: Underdog co-founder and CEO Jeremy Levine sold prior startups to both DraftKings and the parent company of FanDuel, but recently told employees that he has no intention of "finishing third again."
He argues that Underdog has built its own tech, unlike incumbents that relied on overseas platforms, which makes it more "fun" and approachable for U.S. users who haven't set foot in physical sportsbooks.
Backers of Underdog Fantasy include BlackRock, Harris Blitzer Sports Entertainment, SV Angel, Mark Cuban, and Kevin Durant. Along with PrizePicks and DraftKings, Underdog Fantasy is widely considered one of the top 3 DFS sites in terms of market share in the US.
"I first met Jeremy three or four years ago as the business was just getting off the ground, and it seemed implausible that a new startup could emerge in that space," explains Spark Capital partner Will Reed. "So I'd wish him luck, and then each year he'd come back having done what he said he'd do."
The company offers a DFS product but has now moved more into a traditional sports betting offering in North Carolina and plans to do the same in Missouri.
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