Underdog Fantasy raises Series C at $1.225B valuation as it challenges legacy sportsbooks with consumer-first product

Summary

Underdog Fantasy has closed the first tranche of its Series C at a $1.225 billion pre-money valuation, led by Spark Capital. The company, which turns five years old this year, operates pick-em fantasy games in 36 states and broader sports gaming products across 41 states, with licensed sports betting live in one state and Missouri expected to follow on December 1st.

Founder Jeremy started the business with a founding team of seven, all of whom had worked together previously at Draft, an earlier fantasy platform whose products were acquired and effectively taken away from their original users. That existing fan base gave Underdog an early customer base and word-of-mouth flywheel from day one. Nearly a third of new customers come from directly attributed referrals — the top acquisition channel ahead of media partnerships and paid marketing.

Content as distribution

Two years ago, Underdog built a studio set in Gilbert Arenas's basement. That show, now called Gil's Arena, is by the company's own measurement the fifth-largest daily sports show in America. Underdog has since added additional shows and describes the content strategy as meeting sports fans where they already are rather than buying attention.

The product thesis

The competitive framing is straightforward: every major incumbent in US sports betting — FanDuel, DraftKings, and the European operators — runs on legacy technology built for UK and European markets. When the Supreme Court overturned PASPA in 2018, operators had 31 days before New Jersey went live, which meant the only viable option was importing existing European tech stacks. The result is a generation of sportsbook products that look nearly identical, Jeremy argues, built for high-volume transactional bettors rather than casual American sports fans.

Underdog built its technology stack from scratch, covering both fantasy sports and its licensed sports betting product. The pitch is the Robinhood analogy: simpler, more approachable, less financially transactional — a $10 opinion on tonight's game rather than a high-stakes wagering interface. Whether that positioning holds as the company moves deeper into regulated sports betting, where it competes more directly with the incumbents on their home turf, is the open question.

The regulatory context matters here. Real-money fantasy sports came under coordinated attack in 2015, when 15 attorneys general declared the business illegal and the industry faced simultaneous FBI and DOJ investigations within a six-month window. The industry responded by lobbying for explicit legislative protection, which now exists in 22 states. Online sports betting has since been legalized in roughly 28 states following the PASPA repeal.

Underdog's earliest capital came in at a $6 million valuation. The Series A was led by Kevin Carter, now at N Capital, who had backed Jeremy's first company 15 years earlier and stretched well outside his fund's typical mandate to lead the round. The path from that seed to a $1.225 billion Series C in five years is the execution record Spark is now betting on.