Fanatics hits $12.8B valuation after latest funding round
Sports merchandise retailer Fanatics raised another $320 million from existing investors, bringing its valuation to $12.8 billion.
Leading the latest funding round were Silver Lake together with Fidelity, Neuberger Berman, Franklin Templeton, Thrive Capital, Blackstone and Major League Baseball, according to sources close to the deal.
Fanatics plans to use the funds to acquire more licensing rights, mergers and acquisitions, international expansion and other business opportunities, as well as to scale up its vertical model of e-commerce.
Fanatics is expanding in every direction it can as sales lift its business. Over the course of a few months, the company acquired college headwear brand Top of the World and sports merch company WinCraft, entered the China market, and partnered with Lids and Barnes & Noble Education to help supply and operate college websites and bookstores.
The acquisitions and partnerships feed into Fanatics' vertical model, developed by executive chairman Michael Rubin. The strategy brings together ownership, design, production and distribution of merchandise exclusive to Fanatics so that it can "sell unique, specialized and differentiated products that cannot be commoditized by the Internet," according to the company.
Along with acquisitions, Fanatics has been prolific in forging partnerships. Starting in 2020, it started making all Nike-brand NFL fan gear sold at retail. It has also partnered with J.C. Penney to open shop-in-shops and in 2019 made a deal with Walmart for an online sports merchandise shop, among other partnerships.
Sources said that Fanatics had its best year ever in 2020, and that global e-commerce sales were up more than 30% year over year in 2021 so far, with sales for the year projected at $3 billion. The latest funding doubles the company's valuation.
Even as its valuation balloons, the company has no immediate plans to launch an IPO despite the hot market for equities. "While an IPO is clearly an available option to us, there is no update on any timeline," a spokesperson said in an emailed statement. "Our focus remains on building a great global company and strengthening our vertical commerce business model."