What is DraftKings?
Draftkings.com launched in 2012 with $1.4M in seed capital and their main office is located out of Boston, Massachusetts. They are a provider of daily and weekly fantasy sports contests that you play in for real cash and prizes. They are a part of a new wave of fantasy sports contests called “Daily Fantasy Sports” or “DFS” for short that began to gain popularity around 2011. Them along with Fanduel.com are credited with revolutionizing the industry and bringing DFS to the forefront in online fantasy sports gaming. As of 2015, Draftkings is one of the fasting growing sports start-ups in the USA and are giving away over $1Billion in prize money. Heard enough visit our top partner Draftkings.com.
The DraftKings Team
Co-Founders: Jason Robins, Matthew Kalish and Paul Liberman CEO Jason Robins went to Duke University where he got a Bachelor of Science degree and was an executive at Capital One and then Vistaprint. A diehard sports fan and avid fantasy sports player he hatched the idea of Draftkings with his Co-founders Kalish and Liberman while working at Vistaprint. In the early days, they worked out of Liberman’s house and only offered head to head baseball contests for the 2012 season. All 3 co-founders have a strong background in data and analytics which fits perfectly in the daily fantasy landscape. There approach to dominating the DFS market has been fearless and aggressive. This approach has rapidly allowed them to close the gap between them and rival Fanduel, who was the first DFS site to dominate the market well before Draftkings arrived.
Venture Capital Investment
To date, Draftkings has raised approximately $75 Million from various investors. In 2015, there was apparent deal with Disney to invest $250M into Draftkings but the deal fell through when Disney backed out. It is rumored Disney had second thoughts on whether Draftkings fit into their family-friendly business model and backed out of the deal. They did, however, come to terms on exclusive advertising partnership with Disney-owned ESPN.
Here is the breakdown of all Draftkings investments so far:
July 2012 – $1.4M Seed Money
Investors: Atlas Venture
May 2013 – $5.6M Series A
Investors: Atlas Venture, BDS Venture Fund, Boston Seed Capital, Jason Robins, Jordan Mendell
August 2013 – $3M Venture
Investors: Unnamed investors
November 2013 – $24M Series B
Investors: Redpoint Ventures, Atlas Venture, BDS Venture Fund, CGV Capital, Jordan Mendell
August 2014 – $41M Series C
Investors: The Raine Group, Atlas Venture, CGV Capital, Redpoint Ventures
July 2015 – $300M Series D
Investors: 21st Century Fox, Atlas Venture, Kraft Group, Major League Baseball, Major League Soccer, National Hockey League, The Raine Group
Draftkings Partners and Sponsorships
Over the last few years, DK has aggressively pursued partnerships with some of the biggest leagues and organizations in North America in order to grow their audience and player base. These strategic business moves have helped close the gap between them and their biggest rival in the industry Fanduel. Here is a list of their biggest deals to date:
Draftkings and Major League Baseball
In 2013, MLB became the first professional sports league to dip its toes in the DFS waters when it purchased a small stake in Draftkings.com. This partnership made DK the official daily fantasy game of Major League Baseball and earned them a prominent display on MLB’s website. In April of 2015 MLB extended and expanded their partnership with Draftkings and even MLB commissioner Rob Manfred came out in support of the legality of daily fantasy sports saying, “We see DraftKings as a form of fantasy baseball akin to the traditional fantasy that has been a part of our game for years and years.” In 2015, Draftkings became even more visible with ads featured heavily on live MLB telecasts and pre-game shows. This new deal gave Draftkings more exposure across multiple MLB properties including mobile and live streaming and also made them official sponsors of the MLB All-Star game.
MLB Teams Partnered with Draftkings
Atlanta Braves, Baltimore Orioles, Boston Red Sox, Chicago White Sox, Cincinnati Reds, Cleveland Indians, Colorado Rockies, Detroit Tigers, Houston Astros, Kansas City Royals, Los Angeles Angels, Los Angeles Dodgers, Milwaukee Brewers, Minnesota Twins, New York Mets, New York Yankees, Oakland Athletics, Philadelphia Phillies, Pittsburgh Pirates, San Diego Padres, San Francisco Giants, St. Louis Cardinals, Tampa Bay Rays, Texas Rangers
Draftkings and the NFL
The biggest prize for daily fantasy sports sites including DK is landing the NFL as an official partner and this has yet to happen at this time. However, in 2015 Draftkings was able to land some exclusive partnerships with multiple NFL individual teams further expanding their exposure into the NFL brand. Most of the team deals include exclusive branding and in-stadium experiences for fans. Some stadiums will even include a Draftkings fantasy lounge for fans including Dallas AT & T Stadium and the new Minnesota Vikings stadium.
NFL Teams Partnered with Draftkings
Atlanta Falcons, Carolina Panthers, Dallas Cowboys, Denver Broncos, Kansas City Chiefs, Miami Dolphins, New England Patriots, New York Giants, Oakland Raiders, Pittsburgh Steelers, Tennesse Titans
Draftkings and National Hockey League
In the fall of 2014, DK entered a partnership deal with the NHL for two years. While the NHL might not be considered a big 4 sport to most Americans, it is massive in Canada and gives Draftkings a nice exposure to the broader North American market. The deal makes Draftkings the “Official Daily Fantasy Game of the NHL” and gives them exclusive rights to NHL intellectual property. As well, DK gets major advertising exposure across all of the NHL’s platforms including their website, mobile app, social media and prominent TV sponsorship roles.
NHL Teams Partnered with Draftkings
Boston Bruins, Chicago Blackhawks, Colorado Avalanche, Detroit Red Wings, Los Angeles Kings, New York Rangers, St. Louis Blues
Draftkings and the UFC
In February of 2015, DK added to their portfolio of partnerships by inking an exclusive deal with the UFC. This again makes Draftkings the Official Daily Fantasy Sports Partner of the UFC and gave them prominent advertising space on UFC mats and ring posts for live events. The deal also allows DK to offer exclusive promotions and prizes for their players like VIP trips to live UFC events. Length and terms of the deal were undisclosed.
* In 2016, the contract between the two companies expired and no renewal has been negotiated at this point.
Fighters Partnered with Draftkings
Jon “Bones” Jones
Draftkings and NASCAR
NASCAR entered the DFS space in May 2015 and chose Draftkings as the site to partner with. It’s a 3-year deal which gives DK an exclusive license to run NASCAR racing games on their DFS platform.
Race Team Alliance
To further solidify their place in the NASCAR world in July 2015 DK partnered with the RTA, which is the group that represents all 18 Sprint Club Teams. The multi-year deal will allow the teams to support and promote Draftkings games to NASCAR fans. We wouldn’t be surprised to see a full Draftkings sponsored car in future races.
Draftkings and Major League Soccer
The biggest North American soccer league joined the Draftkings partner bandwagon in July of 2015. As a part of the deal, DK will get prime in-stadium advertising and exposure across all MLS digital platforms. Together they hope to innovative and develop the best Fantasy Soccer experience for their players and fans.
Other Draftkings Partners
Here is a full list of other official sponsorship deals, team partnerships and arena deals Draftkings has solidified over the years:
- World Series of Poker
- World Poker Tour
- Breeders Cup
- Belmont Stakes
- Kentucky Derby
- Boston Celtics
- Dallas Cowboys
- Denver Broncos
- Golden State Warriors
- Houston Rockets
- Los Angeles Clippers
- Minnesota Timberwolves
- New England Patriots
- New York Giants
- New York Knicks
- New York Liberty
- Philadelphia 76ers
- Pittsburgh Steelers
- Sacramento kings
- Madison Square Gardens
- Staples Center
- Deutsche Bank Championship
As Draftkings continue to explode in growth and company value, rumors are persistent that they will soon be going public. This became even more possible when Draftkings made CNBC’s Disruptor 50 list in 2015. However, in a segment with Mad Money’s Jim Cramer on May 15, 2015, CEO Jason Robbins made it clear that issuing an IPO is far off his radar at this point.
“Right now we are looking at a lot of different options, but that’s probably the last thing on our mind. We’re just trying to build a great business and engage sports fans.”
While Jason has been steering clear of the issue for now, that doesn’t mean that it won’t happen in the near future. With the staggering revenue growth Draftkings has achieved in such a short time and the fact that Daily Fantasy Sports is still in its infancy the sky’s the limit for this billion dollar industry. While it looked like DK might have gone public sometime in 2016, due to the ever-changing legal landscape surrounding DFS we don’t see any IPO happening for Draftkings till at least 2017.
Draftkings By The Numbers
- 2013 Entry Fees – $45 Million
- 2014 Entry Fees – $304 Million
- 2013 Revenue – $3 Million
- 2014 Revenue – $40 Million
*Since the original posting of this article Draftkings and Fanduel, the two top sites in Daily Fantasy Sports, announced their plans to merge. They are expected to merge in the 3rd or 4th quarter of 2017.
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