Underdog Fantasy, a rapidly growing sports gaming company based in Brooklyn, New York, has announced a successful Series C funding round, raising $70 million in the initial close. This investment brings the company’s valuation to $1.23 billion, a significant increase from its Series B valuation of $485 million in 2022. The funding round, which could total more than $100 million, is led by Spark Capital, a major player in venture capital with a history of backing successful tech companies like Twitter, Slack, and Discord.

Why Underdog’s growth matters:

Since its inception in 2020, Underdog has rapidly established itself as a key player in the fantasy sports and sports betting industry. With a focus on creating an engaging and user-friendly platform, the company has attracted nearly four million users across the United States. This latest funding round underscores growing investor confidence in the company’s future prospects.

The Series C funding will primarily be used to continue expanding Underdog’s innovative products, particularly its technology built in-house, unlike competitors who often rely on offshore platforms. CEO and Founder Jeremy Levine emphasized the importance of the investment, stating, “This investment is a real accelerator. We’re going to continue to invest in people and product—as fast as we can. There is so much more to build, and we’re going to keep building.”

Underdog positions itself as the only major player in the sports betting market that has built its technology from the ground up, focusing on delivering an accessible and enjoyable experience for U.S. users, many of whom are new to sports betting. This approach has set the company apart from established competitors, providing a more user-friendly platform that doesn’t overwhelm first-time users with complex betting options.

Despite operating in a competitive market, Underdog has managed to differentiate itself by combining fantasy sports and sports betting in a single platform. The company now ranks as the fourth most downloaded sports gaming app in the U.S., a notable achievement in a rapidly growing market.

Expanding operations amidst challenges:

While Underdog’s funding news is undoubtedly positive, the company has faced its share of regulatory challenges. The most significant of these was its recent exit from the New York market. After a settlement with the New York State Gaming Commission (NYSGC), Underdog paid $18 million for violating the terms of its temporary license, which it had obtained through the acquisition of Synkt Games. Despite this setback, Underdog has continued to expand into other states, including launching its popular Champions Pick’em product in neighboring New Jersey and Delaware under a peer-to-peer model. The company is also preparing for its expansion into Missouri as the state moves closer to launching its online sports betting market later this year.

Underdog’s success is largely attributed to its commitment to creating top-tier products for sports fans in the U.S. The Series C round has allowed the company to further invest in its technology and customer experience, which Levine attributes as the keys to its ongoing success. In his statement, he emphasized the company’s focus on building a superior product, stating, “We’re going to keep building, and as fast as we can.”

According to Axios, this commitment to innovation is why the company has earned the support of high-profile investors like BlackRock, SV Angel, Mark Cuban, and Kevin Durant. In addition to its strong backing, Underdog’s ability to attract top talent from the tech, gaming, and sports sectors has positioned it as one of the most innovative companies in the industry.

As the company prepares for continued growth, its next steps include expanding its sportsbook offerings, which began in North Carolina last year. Early returns have been promising, though the company is still positioning itself to compete with larger, more established operators. Underdog’s aggressive expansion plans, fueled by this new round of funding, will likely see the company increase its footprint in key U.S. markets in the coming years.