The daily fantasy football game provider DraftKings secured Series B funding from Redpoint Ventures and Atlas Venture, BDS Ventures, and GGV capital to the tune of $24 million dollars.
DraftKings is a Boston based daily game provider that launched in April of 2012. It provides pay contents where players can participate for cash prizes. It also offer free games however its revenue stream comes from that paid games.
The company disclosed that since August 2013, DraftKings customer base has tripled and has a 10x year over year revenue growth. In addition, the DraftKings' players spend over 5 hours a week on the website and mobile app. The company has shelled out over $50 Million in case prizes in 2013.
FtSb Says: DraftKings ability to secure funding bodes well to their an execution of their business plan since launching over 18 months ago. DraftKings didn't disclose how larger there player base was and did not disclose how much revenue they were generating or if they were operating at a loss.
The only growth strategy for a game provider that relies solely on player fees generation is to expand the player base. The challenge their will be the nagging question: Is fantasy football considered gambling? In addition, the company will also have to compete with the growing number of daily game providers that are also going to fighting for this growing pie. I predict there will be consolidation that will occur in daily fantasy game market.