Sports-centered e-commerce site Fanatics, owned by Kynetic, grabbed the attention of Silicon Valley venture capital firms Andreessen Horowitz and Insight Venture Partners to raise a $150 million round of funding at a $1.5 billion.
Fanatics also acquired sports e-commerce company Dream, Inc, which also sells sports merchandise. The full press release is below.
Fanatics Completes Acquisition of Dreams; Receives $150 Million in Equity Funding
JACKSONVILLE, Fla., Jun 06, 2012 (BUSINESS WIRE) — Fanatics, Inc., a leading online retailer of officially licensed sports merchandise, today announced it has completed its previously announced acquisition of Dreams, Inc. In conjunction with the acquisition, Fanatics closed a $150 million equity investment led by Insight Venture Partners, with participation from Andreessen Horowitz, and a $75 million line of credit led by Bank of America. The funds will also be used to support future growth of the business.
“The Internet allows for a significantly broader assortment of licensed sports merchandise to be sold to the consumer — especially to the displaced fan who is typically unable to purchase their favorite teams’ merchandise in local retail stores. As a result of this acquisition, Fanatics is even better positioned to deliver a superior customer experience for all sports fans,” said Alan Trager, CEO of Fanatics. “In addition to providing greater product assortment, we are focused on expanding our distribution capabilities and opening regional fulfillment centers to deliver fans’ orders faster than before.”
“We’re excited about the opportunity to invest again in the Fanatics team,” said Deven Parekh, Managing Director at Insight Venture Partners. “Our prior investment in Fanatics led to significant growth and success for the business, helping the Company achieve important milestones, including more than doubling its revenue. With the acquisition of Dreams, we believe Fanatics will continue its trajectory as the licensed sports merchandise business continues to thrive online.”
In addition to its own Fanatics and FansEdge brands, the company operates licensed sports merchandise e-commerce sites for its partners, including major professional sports leagues, leading professional and collegiate teams, media sites and sports apparel manufacturers. Following the close of the Dreams acquisition, Fanatics headquarters will remain in Jacksonville, FL. The company will also operate offices in the suburbs of both Philadelphia and Chicago.
“Our goal is to build one of the world’s truly great e-commerce companies,” said Michael G. Rubin, CEO and founder of Kynetic, who also serves as the Executive Chairman of Fanatics. “The combination of Fanatics and Dreams, the confidence in our business reflected in the investment from Insight and Andreessen Horowitz, and our expected revenue of $1 billion in 2013, all underscore our momentum toward achieving this goal.”