Fanatics raised $350 million in a Series E funding round, valuing the sports fan online retail giant at $6.2 billion, up from $4.5 billion in its last funding round, according to reports.
According to the Wall Street Journal, Fanatics had initially planned to raise $250 million, but the offering was oversubscribed and lifted to $350 million as Fanatics has been able to increase sales by 30 percent for nearly five months despite the shutdown of sports leagues in mid-March.
Fidelity, Thrive Capital led the investment round with participation from Franklin Templeton and Neuberger Berman. Goldman Sachs was the exclusive placement agent for the transaction.
The funding round is expected to be Fanatics’ last financing as a private company with the next capitalization an IPO. No timetable was been set for the public offering.
The company, which grossed $2.5 billion in 2019, plans to use the new funding to accelerate its v-commerce (vertical commerce) strategy, or in-house production capabilities, through additional rights acquisition and mergers and acquisitions.
On its website, Kynetic, the parent of Fanatics, said v-commerce “helped Fanatics become one the only highly-scaled, vertical e-commerce companies. The model allows for incredible speed to market, benefiting not only customers but the fans that shop with the company’s retailers and partners. It also provides the opportunity for Fanatics to continue to establish strategic partnerships and deals that drive industry growth. It is thanks to the v-commerce model that the company has grown by 39 percent (compound annual growth rate) since 2002.”
Fanatics ramped up in-house production capabilities over the last several years that was supported by the May 2017 acquisition of Majestic Athletic. Internal manufacturing capabilities have also become more important as Fanatics has secured additional rights to manufacture fan apparel with all of the major sports leagues, plus MLS. It has also scored deals to become a primary partner for licensed merchandise for universities.
Fanatics was valued at $4.5 billion in 2017 when SoftBank led a $1 billion round in the company. At the time, the National Football League and Major League Baseball collectively invested $150 million in Fanatics, and the new funding round results in a $100 million equity increase in their holdings in Fanatics.
Fanatics operates more than 300 online and offline partner stores, including the e-commerce business for all major professional sports leagues (NFL, MLB, NBA, NHL, NASCAR, MLS, PGA) and more than 200 collegiate and professional team properties, which include several of the biggest global soccer clubs (Manchester United, Real Madrid, Manchester City).
Photo courtesy Fanatics
