San Francisco-based Spark Capital has invested $70m in the business in a round expected to exceed $100m.

Underdog highlighted it marks the sports gaming industry’s largest ever investment from a Silicon Valley venture capital firm, arguing it underscores market confidence in the company’s growth and potential.

It follows Underdog being listed in LinkedIn’s list of its top 50 start-ups in September last year, the only online sports betting business to make the list.

The business said the money would primarily be used to invest in its products, as well to hire new talent.

Jeremy Levine (pictured), CEO and founder of Underdog, said: “Spark’s investment is a real accelerator. We’re going to continue to invest in people and product — and as fast as we can. There is so much more to build, and we’re going to keep building.”

Underdog aims to challenge DFS status quo

Founded in 2020, Underdog is one of the most well-known challenger brands in the Daily Fantasy Sports and sports betting space.

According to the company, it currently has 4 million customers nationwide and is now the fourth most downloaded sports gaming app in the US.

Will Reed, Spark Capital general partner, added: “This investment fits Spark’s philosophy of backing products we love from creators we admire.

“Underdog has proven they can win where it matters most: product. They’ve also shown they can attract top talent from gaming, tech, and sports. Their unwavering focus on product and customer experience is why they’ve emerged as the most innovative player in sports gaming.

“We see massive opportunity ahead and are thrilled to be on the journey with them to make sports more fun.”

While the company has enjoyed rapid growth in recent years, it has been caught in regulatory cross-hairs at times, with some states finding problems with its pick’em bets.

This month, the operator agreed to exit New York and pay a $17.5m regulatory settlement with state gaming regulators, after it was found not to have abided by the terms of its temporary DFS licence.