Participated · Equity · Apr 2022

Fanatics began as an e-commerce seller of sports gear and has expanded into a broad sports platform that includes apparel, collectibles, betting and gaming. The company has amassed a database of more than 94 million fans. This year it acquired Topps for $500 million and, in partnership with LeBron James and Kevin Durant, bought Mitchell & Ness. Fanatics signed a long-term deal with Nike to manufacture college sports fan apparel and recently signed Japan’s Tokyo Giants. The company is preparing to launch sports betting in 2023 and projects that betting plus other segments could yield up to $8 billion in annual profit over the next decade. Fanatics estimates revenue, including its Lids segment, will be approximately $8 billion in 2023 and is weighing an initial public offering. Fanatics operates a large sports commerce business selling licensed apparel and fan gear directly to customers for leagues, teams and players. While commerce remains its biggest revenue source, the company has expanded into Collectibles (including its acquisition of Topps), an NFT arm through majority ownership of Candy Digital, and a fledgling betting and gaming division. Fanatics says it is positioning itself as a “global digital sports platform” and describes itself as a tech company. The firm projects $5 billion in revenue this year, up from $2.2 billion in 2017. The company has raised a total of $4.2 billion in funding, according to Crunchbase. Leagues, players’ associations and team owners are now strategic stakeholders as Fanatics broadens beyond its legacy merchandising business. Fanatics separated its trading-card business from its merchandise operations in August and has secured licensing rights that cover MLB, the NFL and the NBA. One month after capturing those league licenses it raised a $350 million funding round that values the trading-card unit at more than $10 billion. Management has recruited executives such as former IAC CFO Glenn Schiffman and launched related initiatives like NFT company Candy Digital to position the business as a technology-enabled collector platform. Fanatics plans to integrate services for collectors — insurance, grading, storage and a marketplace — and to collect transaction fees across those offerings. The company has indicated it may acquire an existing card maker (Upper Deck is cited as a likely target) rather than build manufacturing from scratch. Critics note the licensing rights do not transfer for a few years and some observers call the agreements akin to futures contracts; traditional card manufacturers together are expected to generate close to $1 billion of EBITDA this year, a benchmark cited in valuation discussion. Fanatics operates as a sports-focused e-commerce retailer, selling licensed apparel and merchandise for major leagues, clubs and athletes and also running some physical retail locations. The company has commercial partnerships with the NFL, MLB, NBA, NHL, MLS, NASCAR, European soccer clubs and more than 300 individual teams, and recently signed a multi-year online merchandising deal with athlete Marshawn Lynch. Fanatics reported $2.5 billion in revenue in 2019, and its sales were up slightly in the first half of 2020 as roughly 30% e-commerce growth offset losses from its brick-and-mortar stores during the sports shutdown. Management plans to use new capital to accelerate rights acquisition and pursue further M&A activity. The company is majority controlled by executive chairman Michael Rubin through his holding company Kynetic, which owns nearly half of Fanatics. Fanatics is expected to make an initial public offering its next capitalization step, though no timetable has been announced. Fanatics is a Jacksonville, Fla.-based sports e-commerce company that helps leagues and teams sell licensed apparel and fan gear directly to customers. It sells and sometimes manufactures team jerseys and other products and in April acquired Majestic sportswear, which has made Major League Baseball on-field uniforms. The company is headed by CEO Doug Mack, who joined three years ago, and executive chairman Michael Rubin remains an active entrepreneur. Rubin's e-commerce holding company Kynetic holds stakes in former GSI subsidiaries including Rue La La, ShopRunner and Fanatics. Fanatics says it expects to generate $2.2 billion in revenue this year. The company has focused on selling primarily through its own site and has taken actions against unauthorized sellers on platforms such as Amazon.

Participated · Series B · Jul 2021

LeagueApps offers a software platform and the NextUp program to help youth and local sports organizers manage and grow clubs, tournaments, leagues, camps, and facilities. The company provides tools, partnerships, and community-building resources aimed at strengthening the youth sports industry and expanding leadership and networking opportunities for organizers. It also runs FundPlay, a philanthropic program focused on sports-based youth development in underserved communities, and is a founding member of the PLAY Sports Coalition. Co-founded by President Jeremy Goldberg and CEO Brian Litvack, LeagueApps serves organizations from teams and clubs to professional leagues. The company says it will use the investment proceeds to advance its role in providing organizers the tools, partnerships, and community they need to succeed on and off the field. The article does not disclose operating metrics or financial results. LeagueApps offers registration and management software that acts as an operating system for youth sports organizations, enabling website-building, registrations, messaging, payments and information-sharing with associations. It charges a small upfront fee and takes a percentage of transactions processed through its platform. The company also operates NextUp for leadership development and networking and runs FundPlay, a philanthropic program focused on sports-based youth development in underserved communities. LeagueApps was founded in 2010 and is New York-based. The business rebounded after COVID-19 and processed more than $2 billion in transactions by spring 2021, serves over 3,000 sports organizations, and projects to process more than 4 million registrations in 2021. The company plans to use new capital mainly to invest in product and engineering to provide more solutions to youth sports organizers.

Participated · Equity · Nov 2018

Peak Theory develops Cubcoats, a two‑in‑one children’s product that zips between a hoodie and a puppet stuffed animal. Founders Zac Park and Spencer Markel began prototyping in September 2016 and finalized designs in November 2017; Park previously worked as a product director at AKQA and Markel was an M&A lawyer at DLA Piper. Cubcoats went viral and the company expects between $2 million and $5 million in revenue in its first full year. By July 2018 Peak Theory had secured $5 million in financing from a mix of institutional and celebrity investors. The company has lined up media and entertainment partners including Major League Baseball and NBCUniversal, and is collaborating with the Harmon Brothers on video content. Peak Theory is expanding retail distribution with Nordstrom (roughly 100 stores) and pop-up shops at The Grove and the Americana, and plans to expand Cubcoats into Canada, Australia and across Asia in 2019.

Participated · Series D · Jul 2015

DraftKings operates daily fantasy sports contests and builds its business around professional sports advertising and partnerships. The company spends heavily on marketing — it spent $156M on TV ads last year — and concentrates ad spend around the NFL season. DraftKings has spent the past year fighting dozens of state legislatures and courts to get daily fantasy sports legalized, a legislative battle that has consumed resources. The company hasn’t said how it will use the new funding, though the article notes the timing aligns with the NFL advertising season. Having team and league owners involved on the cap table (the article cites investors such as Robert Kraft and the MLB) is framed as helpful for maintaining relationships with professional leagues. Recent regulatory pressure and legal costs have pressured the company and its valuation over the past 12 months. DraftKings, founded in 2012 by Jason Robins, Matt Kalish and Paul Liberman, is a Boston, Mass.-based skill-based Daily Fantasy Sports (DFS) gaming platform. It enables North American fans to compete in single-day online games for cash and prizes across a wide variety of professional and collegiate sports. The company is the exclusive DFS partner of Major League Baseball, the National Hockey League, NASCAR, Ultimate Fighting Championship and Major League Soccer. DraftKings plans to use the new capital to continue building out its web and mobile products, launch internationally, and explore new vertical expansion opportunities. The article reports a $300M Series D raise to support those initiatives. DraftKings operates daily fantasy sports contests that let users enter new lineups frequently rather than committing to season-long leagues. Founded just two years ago, the company has grown rapidly and expects to pay out about $200 million in prizes this year, including four monthly $1 million prizes during the NFL season. DraftKings has raised nearly $75 million in outside financing to date, including a $41 million Series C led by The Raine Group and a prior $25 million round last November. The company has pursued user growth through acquisitions, buying DraftStreet (retaining much of the team and its New York City office) and acquiring StarStreet's assets and migrating those users to its platform. It plans to use the latest funding to accelerate customer acquisition ahead of the NFL season via TV, radio, digital and mobile channels and to invest in product development with a focus on mobile. DraftKings describes its business as seasonal for customer acquisition and aims to leverage The Raine Group's media, entertainment, and gaming connections to drive growth. DraftKings facilitates fantasy baseball, football, basketball and hockey matchups online and through a series of mobile apps. The company is 18 months old and has seen rapid user and revenue growth. Since August it has tripled its customer base and reported revenue growth of 10x year‑over‑year. About three-quarters of users who signed up in 2012 returned this year, and average users spend more than five hours per week on its site and mobile apps. DraftKings raised $24 million in a Series B led by Redpoint Ventures, with participation from GGV Capital, Atlas Venture, and BDS Ventures. The new funding follows a $7 million Series A raised six months earlier. DraftKings is a Boston-based provider of daily fantasy sports accessible online and via mobile, offering contests across fantasy baseball, football, basketball, and hockey. The company features daily contests with same-day settlement and salary-cap formatted games, and it offers both free and paid contests that pay cash prizes. Launched April 28, 2012, DraftKings has grown rapidly in its first year, becoming the #1 daily fantasy sports mobile app provider and launching contests in six sports. It has surpassed 1 million users across web and mobile, with the average user spending over three hours per week and playing 2.6 different sports. For the 2013 fantasy baseball season the company will award over $20M in cash prizes, including a currently running $5 Million Chase for the Crown tournament. DraftKings plans to use new funding to continue to perfect the customer experience and broadly market its online and mobile short-term fantasy sports offerings.

Participated · Series A · Apr 2015

Shots is a selfie-first social app founded in 2013 by John Shahidi and his brother Sam that centers on raw photos and short videos rather than public metrics or commentary. The app removes comments and hides follower/like counts to reduce bullying and social comparison, and it limits uploads (no camera-roll uploads or special effects) to encourage candid sharing. Shots positions itself as a space for personal self-expression and highlights celebrity users such as Justin Bieber, which has helped build a distinct community. Its user base skews young and female: the company reported about 5 million users in April, roughly half of whom check the app daily, with over 75% female and an average user age of 16. Financially, Shots has been raising follow-on capital to sustain growth and community development, having raised additional funding this year. Shots is a mobile app that promotes a fun, safe, and positive way for users to stay connected with friends. The product is positioned as a fast, pleasant platform for sharing with an emphasis on positivity and no tolerance for cyberbullying. The company encourages users to download the app for free and describes itself as a global community built on positive interactions. The article reports that Shots raised $8.5 million in new funding. No revenue, user counts, or other operating metrics are disclosed in the article. The piece does not detail specific future product plans or uses of the proceeds.