Fanatics' New Trading Card Business Raises $350 Million at Over $10 Billion Valuation - Report

September 29, 2021 9:23 AM EDT
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Fanatics Trading Cards, a new business entity owned by Fanatics Inc., has raised $350 million in funding at a post-money valuation of $10.4 billion, the Wall Street Journal reports.

Trio investors of Silver Lake, Endeavor Group Holdings Inc., and Insight Partners, provided funding for the startup company which has been launched only a few weeks ago. Fanatics, the sports-merchandising giant founded by Michael Rubin, owns an 80%+ stake in the new company.

“With Fanatics owning the rights, they are fundamentally going to change the experience for the fan and collector in a way that the existing rights holders just haven’t done. Hopefully, we’re going to expand the audience of people that access these cards, that trade these cards and want to collect these cards,” said Greg Mondre, co-CEO of Silver Lake.

The rapid growth shows the appeal of the booming trading card business. Last month, the company agreed on several deals with unions representing MLB, NBA, and NFL players. The first two associations also made their own deals with FTC.

“We see a market that has the potential to be disrupted in a way that improves consumer choice, improves consumer experience and also expands the opportunity for the rights holders,” added Deven Parekh, a managing director at Insight Partners.

Earlier this month, StreetInsider reported on rumors that Fanatics is in talks to acquire Rush Street Interactive (NYSE: RSI). As previously reported by The Action Network, RSI management held “productive” meetings with Fanatics on the potential business merger.

Benchmark analyst Mike Hickey has weighed in on rumors to say he believes they are accurate.

“Fanatics recently hired Matt King as CEO, an astonishing move considering FanDuel has the #1market share position in U.S. online sports betting market and was moving toward an initial public offering. We believe that Fanatics desires to compete as an online sportsbook operator, and that building a sportsbook from scratch would be non-optimal given the current growth of the OSB and iGaming markets and the necessity to acquire extensive technology and licenses to compete in each state,” Hickey said in a client note.

Excluding its trading card ventures, Fanatics was valued at $18 billion in August.

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