IIU, the private equity firm led by billionaire financier Dermot Desmond, has invested in Star Fantasy Leagues (SFL), an online daily and season-long fantasy sports start-up.
The amount IIU invested was not disclosed but SFL said it was "significant," and "exceeds" the $2 million (€1.6 million) that has already been invested in the business by its founders Zach and Justin Stanley.
The brothers founded the Rochester, New York-based business in 2012 with capital inherited from their late father and grandfather.
The company does not disclose its revenues but in the United States 41 million people play some form of fantasy sports game and the entire sector it operates in is estimated by Venture Beat to be worth over $1.5 billion a year.
“Daily fantasy sports is a hugely exciting and rapidly growing area,” said Mr Desmond, who has previously successfully invested in technology, sports and gambling businesses, in a statement.
“With Star Fantasy Leagues we have partnered with a company that has best-in-class technology and has the industry leading compliance infrastructure, built by a very talented team. They are uniquely placed to help lead and shape the emerging daily fantasy sports industry and we are very excited to be a part of that journey,” he added.
Previous approaches
Seth Young
, chief operating officer with SFL, told
The Irish Times
that his company had previously been approached by potential investors, but none ranked with IIU.
Mr Young said SFL met all legal and regulatory compliance rules in the United States. “We don’t operate where laws are unfavourable and we can use geo-tracking to ensure this,” he said.
Giving away monetary prizes is legal in fantasy sports in all but 10 states in America because of a clause specifically permitting skill-based fantasy sports games in the 2006 online gambling law.
SFL offers individuals the opportunity to play such games online for real money over an entire season, or in one-day contests.
Mr Young said IIU’s investment would allow it hire more staff on top of its 12 existing employees. SFL’s users currently mainly follow baseball, basketball, ice hockey and American football.
