International sports merchandiser Fanatics has raised $350m (£267.7m/€296.2m) in its latest investment round and appears to be preparing for an initial public offering.
As reported previously, Boston-based financial services company Fidelity Investments and Joshua Kushner’s Thrive Capital secured stakes in the company in deals that value the sports retailer at roughly $6.2bn. Franklin Templeton Investments and Neuberger Berman Group LLC also acquired shares in the firm.
The Series E funding round is likely to be the prelude to an initial public offering, according to the Wall Street Journal. Companies often engage in Series E funding round to boost their valuations ahead of IPOs and Fanatics appears to be taking advantage of increased confidence in the e-commerce sector as shopping habits shift online as a consequence of the Covid-19 pandemic.
Fanatics sells licensed merchandise for various sports teams and leagues, including the MLB, NFL, NBA and the NHL using an agile ‘on-demand’ supply chain. The operating model allows the firm to rapidly produce lines of merchandise in response to events on the field and demand from fans.
Online sales at Fanatics are reported to have increased 30 per cent this year as consumers purchase more merchandise online, although this has been offset by a reported $20m decline in takings at Fanatics’ bricks and mortar retail sites at sports venues around the world.
The company is thought to generate 80 per cent of its revenues from its Fanatics.com online retail site and the remainder through 300 physical team and league stores.
The company has now raised around $1.5bn in investment since 2011. In the last funding round in 2017, Japanese telecoms and internet group SoftBank invested $1bn, more than doubling the $2bn in revenue the firm was expected to post that year.
In May of the same year, the NFL also acquired a three-per-cent stake in the retailer for a fee of $95m, while the MLB was reported to have taken a 1.5 per-cent stake for $50m.
Other investors in the firm include Andreessen Horowitz, Insight Partners, Silver Lake, Temasek Holdings and Alibaba Group.
The $1bn investment from SoftBank helped to accelerate the firm’s global expansion and it now has offices in Europe and Asia where it is also developing relationships with local teams and leagues.
In the UK, Fanatics works with Premier League side Everton and will design the retail facility at the club’s new Bramley Moore Dock stadium.
In June, Ligue 1 giants Paris Saint-German announced a 10-year extension of their agreement with the firm.
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