Fanatics Inc., which started in Jacksonville in 1995, raised $170 million in a new funding round last week, more than doubling its valuation to $3.1 billion from a year ago, reports the Wall Street Journal, quoting “a person familiar with the deal’s terms.”
The Journal reported Friday that Michael Rubin, chief executive of Fanatics’ parent company, Kynetic LLC, said in an interview the online seller of licensed sports merchandise expects $1 billion in revenue this year, up from $800 million last year.
Rubin expects to generate the revenue through a focus on sales, primarily online, of officially licensed jerseys, mugs, jackets and other merchandise, according to the Journal. Rubin said the company is profitable, without providing specifics, and has no plans to take it public.
“The valuation rockets Fanatics over a host of e-commerce sites hovering around the $1 billion mark, such as Zulily Inc. and Rearden Commerce Inc., and suggests there may still be room for growth in an increasingly crowded field that is still dominated by Amazon.com Inc. and eBay Inc.,” wrote Greg Bensinger of the Journal.
The Journal said Fanatics’ valuation brings it closer to competitors that sell more merchandise. Dick’s Sporting Goods Inc. is worth about $6.5 billion on revenue of $5.8 billion, the newspaper reported.
According to the newspaper, Rubin said the new funding comes from Singapore state-owned investment company Temasek Holdings Pte. Ltd. and Alibaba Group Holding Ltd. Temashek gains a seat on the Conshohocken, Pa., company’s board, the Journal said.
Kynetic is based in Conshohocken.
Rubin told the Journal the money would, among other moves, help Fanatics increase its $500 million inventory, fund an overseas expansion and bolster its distribution, including a planned new warehouse in the Western U.S.
“We think there’s huge potential in sports apparel and for Fanatics to grow,” Rubin told the Journal. “We’ll be looking at Western Europe and Asia as places to move into.”
The company raised $150 million last June from venture capital firms Andreessen Horowitz and Insight Venture Partners, giving it a $1.5 billion valuation, according to the Journal.
Brothers Alan and Mitch Trager created Fanatics after the Jacksonville Jaguars franchise was announced in 1993. The business began as a retail shop in a small room in the back of a mall, the company reports. Online retail sales began in 1997.
Fanatics Inc. is based in Jacksonville and is an online retailer of officially licensed sports merchandise as well as sports collectibles and memorabilia
The company’s primary warehouse location is in West Jacksonville at 5245 Commonwealth Ave., its principal address, according to state corporate records.
It operates an expanding call center in Southside at 6800 Southpoint Parkway. The City recently approved expansion renovations at the center by contractor Williams & Rowe Inc.
A Fanatics spokesman said the call-center expansion reflects a growing company. Asked about speculation that Fanatics is looking for headquarters office space, he said it was too early to comment.
Fanatics says it also powers the e-commerce sites of the NFL, NBA, NHL, NASCAR and PGA Tour along with ESPN, NBC Sports, CBS Sports, FOX Sports and more than 200 collegiate and professional team properties.
Its websites include fanatics.com, fansedge.com and mountedmemories.com.
Fanatics Inc. formerly was formerly known as Football Fanatics Inc. It changed its name to Fanatics Inc. in June 2011 and as of June 17, 2011, Fanatics Inc. operated as a subsidiary of Kynetic LLC. Rubin, based in Conshohocken, is its executive chairman.
Alan Trager is CEO, Mitch Trager is CSO and Brent Trager is COO. Thomas Baumlin is CFO, Jamie Davis is president, Jack Boyle is president of merchandising and Kevin Bates is president of IT.
The fanatics.com site lists job openings for positions in Jacksonville, Conshohocken, Boulder, Colo., Northbrook, Ill., Frazeysburg, Ohio, and Louisville, Ky.
Job postings for Jacksonville include affiliate coordinator; collectibles volume sales buyer; IT systems administration; .net developer; PPC (pay-per-click) advertising assistant; QA (quality assurance) analysts and performance engineer; senior software engineer; senior SQL developer; site testing specialist; senior recovery manager of customer experience; software engineer; systems analyst; systems manager; web analytics manager; and web analytics specialist.
By way of background, the fanaticsinc.com site explains that GSI Commerce Inc. announced in February 2011 it signed a definitive agreement to acquire Fanatics Inc., which had more than 400 employees at the time, for about $277 million. Rubin was chairman and CEO of GSI Commerce, based in King of Prussia, Pa.
Rubin launched Kynetic after eBay’s $2.4 billion acquisition of GSI Commerce, which had grown into a global network of e-commerce, multichannel and digital marketing businesses servicing 150 of the top 500 Internet retailers.
Kynetic consists of three previously owned GSI companies: Fanatics, Rue La La, an online private sale destination in the U.S., and ShopRunner, a members-only service that aggregates shopping benefits from top retailers and brands.
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