Fanatics valued at $ 18 billion with new investors including Jay Z

Sporting goods company Fanatics on Monday got a raise of $ 325 million to expand into new areas within its parent company. It is now valued at $ 18 billion, sources told CNBC.

The Florida-based e-commerce company plans to focus on revenue streams outside of merchandising. The division will be headed by Fanatics President Michael Rubin, who will serve as its CEO. Fanatics claims it will make $ 3.4 billion in revenue this year, according to the Wall Street Journal.

Fanatics is looking for new opportunities like sports betting and this decision explains why it is hiring new executives. Last month, Fanatics hired former IAC CFO Glenn Schiffman to play a pivotal role in expanding into new industries such as games and new ticketing models. The company oversees a blockchain linked to its NFT company, Candy Digital.

Former Los Angeles Dodgers president Tucker Kain has joined the company as director of strategy and growth. Matt King, former CEO of Fan Duel, is expected to help run a games and sports games division.

It is still unclear what role fanatics could play in the sports betting industry. The company has considered acquiring sports betting provider PointsBet, but those discussions have come to an end.

Investors in the increase include hip-hop mogul Jay Z and his entertainment company Roc Nation. SoftBank and Major League Baseball also have shares in Fanatics.

The investment continues an active 2021 year for Jay Z. Last February, Moet Hennessy, the wines and spirits division of luxury conglomerate LVMH, bought a 50% stake in its champagne brand, Armand de Brignac. And last March, the Jack Dorsey’s Square platform bought Jay Z’s music service Tidal for $ 297 million in cash and stock.

Meanwhile, Rubin is transforming Fanatics into a more global digital sports company that can serve various sectors of sports (merchandise, gambling, ticketing and the NFT market). Fanatics plans to leverage its user base of over 80 million users linked to its merchandise division.

Fanatics improved its operations through acquisitions in 2020. The company also began operations in China to help increase its valuation from $ 6.2 billion in August 2020 to $ 12.8 billion last March.

Last December, Fanatics bought sports maker WinCraft to expand its presence with non-wearable products. WinCraft sells sports-themed items for the home, office, and automobile, such as clocks and banners. This decision accelerated its vertical commerce activity and strengthened its manufacturing and distribution operations.

The National Football League and MLB benefit from any increase in valuations as the two leagues collectively invested $ 150 million in Fanatics in 2017. Last year, the increase of $ 350 million resulted in an increase of $ 100 million. equity from their holdings in Fanatics.

And as Fanatics increases its stake in the sport, it fuels even more speculation that an IPO is on the horizon. However, the company continues to downplay a potential entry into the public sector.

Asked about his plans for CNBC’s “Squawk Box” last March, Rubin replied, “I think going public is an option for us that we talk about a lot, but it’s not something we are focusing on today. hui. We are focused on building a But I think we are well funded and we have a lot of growth capital to keep growing. “

CORRECTION: This article has been updated to reflect that Fanatics plans to expand into new areas within its parent company. It is not about forming a new society.