Fanatics team up with Hillhouse Capital to launch China-based operation

As Fanatics continues to delay its potential IPO, the sporting goods company is expanding its global operations, this time to China.

The Michael Rubin-led company launches Fanatics China, a joint venture with investment firm Hillhouse Capital, an Asia-focused private equity fund with e-commerce and retail companies in Asia, has the company told CNBC.

Sources close to the deal told CNBC that Fanatics expects “the company alone to account for over $ 1 billion in business in China.” People have requested to remain anonymous because the company does not speak publicly about the financial terms of the partnership.

With the pact, Fanatics could move closer to an IPO. Asked if there was an ongoing update, a company spokesperson told CNBC: “While an IPO is clearly an available path for us, there is no up to date on any calendar. “

Fanatics China will be based in Shanghai and enables the e-commerce powerhouse to open its sports licensing market in the country to its more than 300 global partners, including investors from Major League Baseball and the National Football League, by more than various American professionals. teams seeking to develop their activities in China.

One of the major licensed sports categories in China is soccer. Thus, this partnership allows Fanatics, which has more than $ 3 billion in sales, to better execute e-commerce partnerships with European clubs, including Chelsea, Manchester United, Paris-Saint Germain and Bayern Munich.

Hillhouse was founded by Chinese businessman Zhang Lei and also backs sports retailer Topsports International Holdings, which raised $ 1 billion in 2019 by listing its IPO in Hong Kong, according to Bloomberg.

Topsports is one of the largest sports retailing companies in China and operates more than 20,000 Nike and Adidas retail stores.

In 2018, PE Company achieved its $ 10.6 billion raise and is now trying to outdo it with a $ 13 billion raise. It would be the largest US dollar denominated fund in Asia, according to Reuters.

Fanatics has just emerged from a 2020 year that saw the company raise $ 350 million in a Series E (its last funding round), which increased its valuation to $ 6.2 billion. The Florida-based company has upgraded its parent umbrella with licensed sports merchandise companies to strengthen its vertical business units, including the acquisition of licensed manufacturer WinCraft, CNBC reported in December.

Fanatics China will use the company’s e-commerce business model and Hillhouse’s local market knowledge in its efforts to develop and maximize online market opportunities, create e-commerce sites for leagues and teams, design and launch new retail stores and develop and manufacture products for consumers in China.

With the addition of China, Fanatics expands its global presence outside of the United States, as it also operates in the United Kingdom, Spain, Japan, Germany, Thailand, Australia and India.

Other Fanatics investors include SoftBank Group and e-commerce company Alibaba Group, co-founded by National Basketball Association team owner Joe Tsai.