Underdog Hits $1.225B Valuation with $70M Series C Raise

Underdog has raised $70 million in the first close of its Series C funding, valuing the company at $1.225 billion.

Spark Capital is leading the Series C round, which is expected to exceed $100 million upon completion.

The funding provided nearly tripled Underdog’s valuation after its Series B funding round, which was $485 million.

Underdog has continued to raise significant capital, with the initial Series C funding bringing the total raised to over $140 million. Notable backers include Mark Cuban, basketball superstar Kevin Durant, SV Angel, Harris Blitzer, and BlackRock.

How Underdog Plans to Use Its New Capital

The company has promised that the new funding will go towards further product innovation, and further improving its proprietary technology. “We’re going to continue to invest in people and product — and as fast as we can,” explained Underdog CEO Jeremy Levine. “There is so much more to build, and we’re going to keep building.”

Underdog is known as an innovator in the space and has been vocal in its opposition to regulators who have outlawed Pick’ em-style games, which allow users to create player prop parlays. Regulators and sports betting industry stakeholders have all pushed back against Pick’ ems in the past, with crypto betting, sports events contracts, and online sweepstakes betting now in the firing line.

Underdog has exhibited strong growth in recent years. With nearly four million users on the platform, it is the fourth most downloaded sports gaming app in the United States of America.

The company operates in 31 states, with expansion only halted by state-specific regulatory disputes. It has also begun branching out into regulated sports betting, with North Carolina, Missouri, New Jersey and Delaware all hosting an Underdog online sportsbook.

Regulatory Roadblocks in Key States

Underdog was recently dealt a significant blow, after reaching a settlement with the New York State Gaming Commission.

The settlement will see the company cease all operations in the state, and pay a hefty $17.5 million fine to the state. The case revolved around Underdog operating under a temporary permit granted to Synkt, which the company had previously acquired.

The official paper reads: “Underdog Fantasy agrees to cease and desist on or before March 14, 2025, any operations and offerings in New York that Underdog Fantasy characterizes as IFS that are not expressly authorized by the Synkt temporary permit and provide proof to the Commission of such cessation and desistance.”

Underdog’s General Counsel Nicholas Green commented: “It’s a unique, temporary license issue specific only to New York and not related to any specific format we offer.”

“Any fantasy game created after 2015, no matter the format, is not permitted under the commission’s interpretation of what games a temporary permitholder, like Underdog, can and cannot offer,” he continued.