‘We’ve Only Scratched the Surface.’ Sports E-Commerce Firm Fanatics Closes $1 Billion Funding Round
Sports e-commerce firm Fanatics has closed a $1 billion funding round led by SoftBank Group Corp’s Vision fund, which will give it the firepower to expand internationally, Chief Executive Doug Mack told Reuters.
The new funding will value the Jacksonville, Florida-based company that runs online sales for the National Basketball Association and the National Football League at $4.5 billion – more than twice the $2 billion in revenue expected this year, the company said.
The majority of Fanatics’ business is in the United States where it licenses merchandise and handles e-commerce sales for items such as sports jerseys for teams.
It is hoping to expand its revenue in international markets by leveraging SoftBank’s expertise in Asia, Mack said in an interview on Tuesday. Fanatics, which handles online sales for football clubs Manchester United and Real Madrid, currently gains about 10 percent of its sales internationally.
“It will definitely grow many-fold from there,” Mack said, referring to international sales. “We’ve only scratched the surface of the global opportunity. Soccer is the world’s No. 1 sport, and then there’s cricket. You’ll see us extend our rights to international leagues.”
SoftBank, run by Japanese billionaire Masayoshi Son, is making the bulk of its investment in Fanatics out of its $93 billion Vision Fund, the world’s biggest private equity fund, SoftBank confirmed the funding.
While the majority of the $1 billion in funding comes from SoftBank, the National Football League and Major League Baseball also participated.
SoftBank was introduced to Fanatics by Michael Rubin, the company’s executive chairman who previously founded GSI Commerce, a company that attracted an $100 million investment from SoftBank before it was sold to eBay for $2.4 billion.
Fanatics is also looking to hire more engineers, data scientists and designers with the cash.
Mack said one of the firm’s strengths lay with its technology that allows it to manufacture clothing very quickly.
When Fanatics wanted to raise money for victims of the devastating Hurricane Harvey, it created a “Houston Strong” line of clothing featuring all of the city’s local sports teams. It took less than three days to design the shirts, get permission from the sports teams and start shipping, Mack said.
An initial public offering or sale isn’t on the horizon, Mack said, although the company has been spending on deals. In April, it acquired VF Corporation’s sports licensing group, which owns the Majestic sportswear brand, for $225 million.