Fanatics valuation reaches $31 billion after a $700 million investment round

Fanatics CEO and Co-Chairman Michael Rubin

Shareif Ziyadat | Movie Magic | Getty Images

Michael Rubin’s sports platform company Fanatics has raised $700 million in fresh capital, taking its value to $31 billion, according to people familiar with the matter.

The company plans to use the new money to focus on potential merger and acquisition opportunities in its collectible, betting and gaming businesses, one of the people said.

Fanatics declined to comment.

The round was evaluated and led by a new investor, Clearlake Capital, in addition to LionTree. Existing investors in the new capital increase include Silverlake, Fidelity and Softbank.

Fanatics was previously valued at $27 billion. In March, the company raised $1.5 billion, led by Fidelity and Blackrock, and Michael Dell’s MSD Partners.

Fanatics has experienced rapid growth over the past year. What started as an e-commerce company selling sports gear has grown into a sports powerhouse that has amassed a database of more than 94 million fans.

It’s also been acquiring companies this year: In January, the Florida-based company expanded into the collectibles business with a $500 million purchase of Topps. And in October, the company acquired iconic apparel brand Mitchell and Ness in partnership with LeBron James and Kevin Durant, who hope to use their status as tastemakers to revitalize the century-old brand.

That summer, Fanatics ventured deeper into collegiate sports and signed a long-term deal with Nike to manufacture collegiate sports fan apparel. And last month, Japan’s most popular baseball team, the Tokyo Giants, were signed.

Rubin is now eyeing the sports games market. Fanatics is gearing up to launch sports betting in 2023, joining an already crowded market. Still, Rubin is optimistic, predicting in October at the Sports Business Journal’s World Congress of Sports Conference that sportsbook and Fanatics’ other businesses could generate $8 billion in annual profits over the next decade.

Fanatics revenue, including its Lids segment, is expected to be approximately $8 billion in 2023, according to company estimates. This figure excludes any trading card rights expected in the next few years.

The company is also considering an IPO, and Rubin recently met with more than 90 internet, retail, and gaming analysts from various Wall Street companies to discuss Fanatics’ growth plans.

Fanatics ranked #21 on the 2022 CNBC Disruptor 50 list.

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