Online fantasy sports startup DraftKings has raised $1.4 million in seed financing. Atlas Venture led the round, with participation from Boston Seed Capital, Hub Angels, Angel Street Capital, and undisclosed angel investors.
DraftKings, an online fantasy sports startup, today announced that it has closed a seed round of $1.4 million in a round led by Atlas Venture, with participation from Boston Seed Capital, Hub Angels, Angel Street Capital, and private angel investors. Featuring daily fantasy sports play and same-day settlement, DraftKings makes playing fantasy sports simpler and faster for both seasoned and casual players. Currently offering daily fantasy sports play options in major league fantasy baseball, DraftKings will use the capital raised to fund marketing and product development in anticipation of the 2012 fantasy football, fantasy basketball, and fantasy hockey seasons.
Fantasy sports games are considered games of skill in forty-four states, making playing with financial stakes perfectly legal. Thirty-two million people play fantasy sports in the US and Canada, and two-thirds of all fantasy sports leagues involve fees and payouts that are typically managed offline by a designated member of the league. DraftKings simplifies the process by handling financial transactions through its site while collecting a commission on every stakes game.
“While fantasy sports have been around for 50 years, online daily fantasy sports is much younger and growing rapidly. The sector is ripe for innovation via an analytical approach to marketing and customer relationship management,” said Jason Robins, DraftKings CEO and co-founder.
“There’s an opportunity for a daily fantasy sports platform to dominate the current field,” said Ryan Moore, partner at Atlas Venture. “With a deep understanding of successful gaming franchises, and expertise in customer acquisition and retention, the team at DraftKings has the potential to quickly achieve the top position in this market.”
DraftKings offers daily fantasy sports play with online settlement, providing gamers with a low inertia, high reward way to play. DraftKings provides fans with comprehensive access to fantasy sports by stripping away the most time intensive and obtrusive elements of conventional play, distilling the game to players’ favorite aspects of fantasy sports:
1. Daily fantasy sports games. No more season long commitments.
2. A community at the ready to play. No more hustling to round up a league.
3. On demand draft. Players can pick a new team whenever they choose, which is much more fun than scrounging to substitute mid-season.
4. Players are never “out of contention”. No more going an entire season with a poorly performing team. Engagement remains high for the duration.
5. Daily payouts. For those games involving financial stakes, players can collect immediately.
6. Onsite settlement. DraftKings handles the transactions and distribution of proceeds, freeing up precious administrative time.
For the seasoned fantasy sports fan, DraftKings provides ready access to their favorite games. For the casual player, daily play and the clean and streamlined user interface demystify the fantasy sports experience, removing common hurdles to adoption. “As sports fans, we understand that the technology has to seamlessly support the way consumers intend to play the games; our approach is overwhelmingly customer driven. At the same time, we are seeking to maximize data capture and test engine flexibility for use in customizing future offerings,” said Paul Liberman, co-founder and CTO. All players have the option of playing daily fantasy sports games involving stakes or for free. For those playing with stakes, DraftKings offers the highest payout and deposit match percentages in the sector.
With extensive backgrounds in marketing analytics, customer relationship management, and technical development, the DraftKings start-up team is poised to capitalize on the fast-growing daily fantasy sports market. “Playing fantasy sports should be fun and easy. Our approach is data-driven, but those themes underlay every customer-facing decision we make,” said Matt Kalish, COO and co-founder.
To learn more about DraftKings, please visit www.draftkings.com.
DraftKings is the online gaming destination where players engage in daily fantasy sports competition for cash. For more information visit www.draftkings.com.
About Atlas Venture:
Atlas Venture is a leading early-stage venture capital firm that invests in technology and life sciences companies. Since inception in 1980, we have helped build over 350 companies in more than 16 different countries. Atlas Venture is currently investing from its eighth fund and manages over $2 billion in committed capital. For more information, please visit www.atlasventure.com.
About Boston Seed Capital:
Boston Seed Capital provides seed stage funding for internet-enabled businesses. Boston Seed Capital funds from Boston to anywhere, and alongside exceptional entrepreneurs and teams with innovative breakthroughs. For more information, please visit www.bostonseed.com.
About Hub Angels:
The Hub Angel Group invests across industry sectors as part of its diversification strategy. Since 2000, Hub and its members have invested more than $12 million in a broad range of sectors including financial services, healthcare, water treatment, biotechnology, retail and software as a service. For more information, please visit www.hubangels.com.
About Angel Street Capital:
Angel Street, www.angelstreetcapital.com, based in Providence, RI, provides equity capital to early stage digital media companies. Founded in 2010, the firm’s current portfolio represents over 15 investments in a number of areas including mobile, marketing, data, and financial platforms. The firm works closely with the CEO of its portfolio companies to leverage contacts and assist in business development.