Fanatics and the Rise of E-Commerce Top Investor Softbank

Fanatics and the Rise of E-Commerce Top Investor Softbank

SoftBank Group Corp’s Vision fund strikes again and invests $1 billion in online sports merchandise retailer Fanatics.

We recently talked about this deal when it was rumored:

Fanatics is a fascinating case for how an online retailer can entrench itself into the industry it is working in.

But Softbank is the bigger story here: The Japanese company is shaping up to become not just a major investor in e-commerce companies, but by far the largest one worldwide regarding capital given out. (One can also easily argue they already are a major investor, see below.) The $100 billion tech fund Softbank leads provides the Japanese giant with a lot of cash for investing. Contrary to most other investors in a similar league, Softbank already has quite the experience in investing in online retail.

Reuters:

The new funding will value the Jacksonville, Florida-based company that runs online sales for the National Basketball Association and the National Football League at $4.5 billion – more than twice the $2 billion in revenue expected this year, the company said.

The majority of Fanatics’ business is in the United States where it licenses merchandise and handles e-commerce sales for items such as sports jerseys for teams.

CNBC:

The NFL also invested about $95 million and Major League Baseball added $50 million earlier this year, according to the Journal. […]

Fanatics sells licensed sports apparel on its website, and also operates the web sales for many big sports leagues. Doug Mack, who became CEO in 2014, has emphasized data as the “heartbeat” of the company.

TechCrunch on the valuation and the fear in the industry that Softbank overvalues the startups it invests in, in part thanks to the sheer size of its Vision fund:

Despite the lofty valuation Fanatics was just assigned, [executive chairman Michael Rubin] suggested that SoftBank isn’t throwing around its money, driving up valuations as has become a growing concern for many in the venture industry. He told CNBC instead that SoftBank wasn’t “easy from a valuation perspective. We had even bigger expectations. But we knew they’d be the right partner for us, because if they think it’s strategic and it’s going to be huge, they’re going to figure out a way to get [the deal] done.”

​Softbank keeps investing large sums and thus is not only becoming a king maker but is also becoming an investor with unprecedented holistic insights into the global state of online retail. No one else comes even close.

​More on this topic:

​* Softbank, Giving Out Money Like Candy, Is the Biggest E-Commerce Investor Worldwide | Early Moves
​* Amazon’s New Nemesis: Softbank Pouring Billions Into Each Flipkart, Snapdeal AND Paytm | Early Moves
​* Top Investors: Behind the Scenes at Baillie Gifford, the Scottish Unicorn Hunter | Early Moves

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