FanDuel hands over large chunks of equity to existing investors

FanDuel has given large chunks of equity to existing investors as it seeks to raise new cash ahead of the upcoming NFL season, which could make or break the company’s future.

According to a report in the Herald Scotland the percentage of FanDuel stock owned by investors including Shamrock, KKR, NBC Sports Ventures, Google Capital and Time Warner Investments, has increased from 54% to 71% after the latest transaction.

The amount of cash raised in exchange for the equity was unknown.

As a result the rights attached to the shares held by the company’s seed investors, including founder Nigel Eccles, have approximately halved to a reported 5%.

Investors in a 2014 funding round, led by private equity firm Shamrock Capital Advisors were given one new share for every two existing shares, while investors in a 2015 round led by private equity house Kohlberg Kravis Roberts (KKR) have been awarded 2.35 new shares for every existing share.

The news comes after the DFS operator recently turned off its UK product in order to focus all its available resources on the upcoming NFL season, which industry experts have suggested could decide whether both FanDuel and DraftKings can continue as a going concern.

Daniel Barbarisi, author of acclaimed DFS industry book Dueling With Kings, told EGR recently: “There’s room enough in the DFS world for one big healthy company, but I don’t think the market has shown that it can sustain two. That makes this coming NFL season a crucial time for both companies.

“The loser might not be here at this time next year.”