Exclusive: DraftKings, FanDuel both ready their next Wall Street playbooks
By Liana B. Baker
(Reuters) - FanDuel and DraftKings, the two leading fantasy sports companies in North America, are both planning their next big financial moves – including whether to raise more money privately or do initial public offerings. DraftKings says it would even consider merging with FanDuel.
Based on a number of rounds of funding they are already both worth about $1 billion each, and are growing revenue at a rapid rate as they sign up millions of Americans willing to draft virtual sports teams online and pay fees to enter competitions that last only a few hours but offer big money prizes.
That growth is likely to pick up this month as the National Football League season gets underway, starting with a matchup between the Pittsburgh Steelers and the New England Patriots on Thursday night.
DraftKings CEO Jason Robins said in an interview this week that his company is having "very active conversations with banks" to figure out its options.
"I ask everyone I meet with, should we go public? Should we raise another private round? Should we buckle down and focus on profitability?" Robins said.
He said that DraftKings is set to grow its NFL customer base by ten times from its level last year, thanks to an aggressive advertising campaign across television, digital platforms and billboards.
FanDuel CEO Nigel Eccles said in a separate interview that the company is waiting until January, when it will review its financial performance at the end of the NFL season and then decide if it wants to raise another private funding round or hire banks for an IPO.
"We would in January go to the bankers and say 'this is how football has gone, this is what we think 2016 looks like, when does it make sense (to go public)?" he said. Continued...