Sports fans are a passionate, engaged, highly lucrative bunch, and Fanatics Inc. has raised $170 million to fuel their fervor.
Fanatics is an online retailer of official licensed sports merchandise. The company powers the e-commerce sites of all major professional sports leagues, major media brands, and over 200 collegiate and professional team properties. If you want to buy an NFL jersey, a MLB baseball cap, a NASCAR collectible car, or a branded basketball bag, Fanatics is the online place to do it.
The Wall Street Journal broke the story and said that this massive investment doubles the retailer’s valuation from a year ago, bringing it to $3.1 billion. Michael Rubin, the CEO of parent company Kynetic LLC, said that Fanatics should generate $1 billion in revenue this year.
Fanatics’ inventory includes hundreds of thousands of items and is particularly desirable for people who don’t live near their favorite teams. If you are a diehard NY fan but live in California, Fanatics makes it much easier for you to purchase gear from your team. And sports fans love to wear gear from their favorite teams. I may not be a sports fan myself, but I have enough friends, family members, acquaintances, and colleagues with collections of sports stuff to see the value in the market.
Singapore-based Temasek Holdings and China-based Alibaba Group contributed to this round that will Fanatics will use to grow its inventory, fund overseas expansion, and improve distribution. The company raised $150 million from elite Silicon Valley venture capital firms Andreessen Horowitz and Insight Venture Partners a year ago (to the day) to support the businesses growth.
At the time, Rubin said that his goal was to build one of the world’s truly great e-commerce companies. Its valuation now surpasses those of other big e-commerce sites, like Zulily and Rearden Commerce. Fanatics’ main competitors are Amazon, eBay, and Dick’s Sporting Goods, but an analyst from William Blair & Co told the WSJ that online sporting goods is a growing market.
As the world becomes more interconnected, people are more able to closely follow sports around the world. Americans can watch European soccer (sorry, football) matches and people in Asia can tune into Giants’ games. Along with viewing sports, apparently, comes the need to wear complementary apparel. With this financing, Fanatics prepares to do the heavy lifting of international sports retail online.
The company has thousands of employees, multiple warehouses, and is based in Jacksonville, Florida. Go Jaguars!
Photo Credit: Fanatics