TWO of the founders of daily fantasy sports business FanDuel have successfully closed a $4 million fundraising for their new venture, which is expected to bring its product to market in the coming weeks.
Former FanDuel chief executive Nigel Eccles and ex-design head Rob Jones have raised the money to fund their eSports firm Flick, which they launched at the beginning of this year after leaving their former business.
Unlike FanDuel, which is registered as a UK company, Flick has been incorporated in the US, where Mr Eccles is now based. It is understood that the financial backing has come solely from US institutional investors.
Read more: Final FanDuel founder quits to join former CEO in eSports firm
Although Flick is headquartered in the US, chief product officer Mr Jones is based in Scotland, where he has spent the past seven months creating the engineering team that is currently working on the firm’s product.
Last year Mr Eccles said he wanted to build the firm’s team in Scotland because the country “has some of the best software engineers in the world and deep talent in games development”.
The firm itself has been incorporated in Delaware, which is home to around half the publicly traded companies in the US and is seen as one of the most business-friendly states in the country. In particular, as Delaware has its own chancery court it is easier to resolve business disputes there than in most other states.
While the details of Flick’s product are being kept under wraps for now, it is known that the firm is building an app based around competitive video games.
The eSports model sees spectators watch other people - gamers - compete in video games and Flick will generate revenues by charging people to engage in this via its app.
At the end of last year Mr Eccles said that eSports is an area “that is growing really quickly” and that offers “a huge opportunity”.
On its website Flick said that with over “two billion gamers and nearly 700 million people who regularly watch gaming video content, this is a huge market”.
“We want to give these avid fans an entirely new way of sharing their gaming experience with their friends,” it added.
All five FanDuel founders have launched new ventures since leaving the business they founded less than a decade ago.
Read more: FanDuel cofounder Lesley Eccles gears up for new tech launch
Lesley Eccles, who had been head of marketing at the firm before leaving in 2016, has created a technology business that is working on a product that will launch into the mental health and wellbeing space.
Former technology head Chris Stafford, who also left FanDuel in 2016, set up Edinburgh-based IT consultancy Amber 80 at the end of last year and former chief product officer Tom Griffiths has co-founded a San Francisco-based online management training business.
All five left FanDuel after its private equity backers, led by Kohlberg Kravis Roberts (KKR) and Shamrock Capital Advisors, took control of the firm after its planned merger with rival DraftKings fell apart.
In recent weeks KKR and Shamrock exercised their majority shareholder drag-along rights to push through the sale of FanDuel to Irish bookmaker Paddy Power Betfair without the permission of ordinary shareholders, whose stakes in the firm were wiped out in the deal.
Read more: Final FanDuel cofounder reveals next move with US launch Hone
Under the terms of the transaction Paddy Power Betfair paid off FanDuel’s considerable debts and, based on valuing FanDuel at $465m, gave FanDuel’s preference shareholders a 39 per cent stake in new entity FanDuel Group.
That business, which is already taking advantage of new rules that have legalised sports betting in the state of New Jersey, was formed from the combination of Paddy Power Betfair’s existing US operation with the original FanDuel business.
KKR and Shamrock told the ordinary shareholders, which included angel investors and ex-employees who had converted options into shares, that the valuation placed on FanDuel was not high enough to include them.
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