Fanatics, the online sportswear and equipment retailer, has raised $350 million for its new trading cards subsidiary, which values the offshoot $10.4 billion.
The company secured the fresh capital from new and existing investors, with the latest round led by private equity firms Silver Lake and Insight Partners.
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Endeavor, the international entertainment agency giant, also invested in the funding round.
The three investors represent about 3.4 per cent of ownership, with Fanatics accounting for more than 80 per cent of the business.
Fanatics Trading Cards was launched earlier this year with the retailer recently securing major deals with baseball’s MLB and basketball’s NBA in addition to an agreement with American football’s NFL.
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Last month, it emerged the retail giant agreed an exclusive licensing deal with MLB to produce trading cards and replace Topps, ending the company’s 70-year relationship with the league when its present contract expires in 2025.
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By GlobalDataThe Florida-based firm quickly followed this up with a similar deal with the NBA and its players’ union. It will replace current licence-holder Panini in that role when the sports collectibles and trading card company’s deal with the NBA and NBPA ends in 2026.
Through the major agreements and its new arm, Fanatics has set its sights on dominating the US sports trading cards market as it strategically looks to add more verticals to its successful merchandising business.
It is believed that the NFL, MLB and NBA and their respective players' associations have equity stakes in Fanatics Trading Cards and have raised their stakes by about $1.4 billion as part of the funding round.
The fresh investment is expected to be used to create a sports platform to expand the existing trading cards offering for collectors.
Josh Luber, co-founder of sneaker marketplace StockX, will join Fanatics Trading Cards as co-founder and chief vision officer.
Fanatics itself was recently valued at $18 billion after it raised a further $325 million to expand into new sectors and create a wider sports commerce business.
The NFL initially acquired a 3 per cent stake in the retailer for $95 million, while MLB took a 1.5 per cent stake for $50 million.
The vast group of Fanatics investors also include Alibaba Group, Fidelity Investments, the Boston-based financial services company, Thrive Capital, Franklin Templeton Investments and Neuberger Berman Group.
The ecommerce heavyweight plans to focus on new areas and enhance its presence in the gaming and sports betting market with the creation of a new division.
That division will be led by Fanatics chairman Michael Rubin, who will serve as chief executive as part of a company restructure.
Doug Mack, the current chief executive, will maintain his current responsibilities overseeing the e-commerce operations.
Fanatics has recently made multiple new hires to drive its expansion plans, bringing in Glenn Schiffman, the former chief financial officer of US media company IAC, former Los Angeles Dodgers president Tucker Kain and former FanDuel chief executive Matt King.
Kain joined as chief strategy and growth officer, while King is expected to help lead a sports gambling and gaming division.
As well as sports betting and gaming, the company is seeking to expand into media and ticketing, areas in which Schiffman is set to play a key role.
Fanatics already expanded its operations into China earlier this year via a joint venture with Asian private equity fund Hillhouse Capital.
The firm also recently entered the non-fungible tokens (NFTs) space through digital collectibles start-up Candy Digital.
Fanatics has a strong retail presence within sports and has partnerships with several major properties including motor racing’s Formula 1, basketball’s NBA, ice hockey’s NHL, and European soccer giants Manchester United, Chelsea, Paris Saint-Germain, Bayern Munich and Atletico Madrid.
