Underdog
- Underdog’s valuation has trebled in three years
- Spark’s investment touted as biggest by Silicon Valley VC fund to date
- Firm claims to have more than 4m US customers
Fantasy sports and betting firm Underdog has raised US$70 million in a Series C round led by Spark Capital that values the company at US$1.2 billion.
Underdog expects the round to raise US$100 million by the time it closes and claims Spark’s investment is the single largest by a “top tier” Silicon Valley venture capital firm in a betting company to date.
The valuation is three times the figure achieved in Underdog’s Series B round three years ago and elevates Underdog to ‘unicorn’ status.
Underdog, which was founded five years ago, develops technology and products that it says are designed specifically for the US market as opposed to innovations that scale globally. It has more than four million customers and claims to be the fastest growing sports gaming company in the country.
In addition to its service portfolio, Underdog has also invested in content in a bid to attract customers in what is a highly competitive market. It says the fresh capital reflects confidence in its vision and the industry at large.
“Spark’s investment is a real accelerator,” said Jeremy Levine, chief executive and founder of Underdog. “We’re going to continue to invest in people and product – and as fast as we can. There is so much more to build, and we’re going to keep building.”
“This investment fits Spark’s philosophy of backing products we love from creators we admire,” added 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.”
Previous backers include BlackRock, Acies Investment, Mark Cuban, former owner of the National Basketball Association’s (NBA) Dallas Mavericks, National Football League (NFL) wide receiver Odell Beckham Jr, Breon Cororan, former chief executive of Paddy Power Betfair, and Mark Pincus, founder of Zynga.
SportsPro says…
The size and valuation of this investment suggests that there is still plenty more growth to come in the US betting market.
A period of explosive growth which saw vast sums spent on marketing, technology and acquisitions has given way to an era of consolidation, with first movers possessing a major advantage over new entrants. Indeed, the reported struggles of ESPN Bet suggest that even the worldwide leader in sports isn’t guaranteed success.
Underdog’s focus on proprietary technology could explain this. Before individual states were given the ability to legalise gambling, hotbeds of digital innovation were in mature markets such as the UK. Underdog’s ability to create its own technology for the US market could mean greater flexibility in terms of rollout and more compelling products for bettors.
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