The surge in sports betting platforms and states where it is legal has created a huge market opportunity for companies that operate in the growing sector. One such company will test the public markets with an IPO scheduled for Tuesday, Sept. 14.
The Sportradar IPO: Sportradar (NASDAQ: SRAD) is seeking to sell 19 million shares at a price point of $25 to $28. The company will be valued at $8.3 billion based on the mid-point of the IPO pricing range.
Company founder and CEO Carsten Koerl owns 34.1% of the company and will own 81.8% of voting power after the IPO.
About Sportradar: The company is a leading technology platform and the number one provider of business-to-business solutions for the global sports betting industry.
Genius Sports Ltd (NYSE: GENI), which went public via SPAC, is a competitor to Sportradar and the two companies operate a near duopoly with exclusive rights to the top sports leagues around the world owned by one of the two companies.
The company has more than 900 sports betting customers and covers over 750,000 events annually for 83 sports. Live data is provided for more than 600,000 events across 37 sports. Sportradar also counts more than 350 media companies as customers providing products and services.
Investors in the company include Canada Pension Plan Investment, Michael Jordan and Mark Cuban. The National Football League owns a stake in the company via its 32 Equity Venture arm, giving each NFL team a stake in the company.
Todd Boehly, who tried to take the company public with HZON, is investing in the company as part of the public offering.
The Thing Behind The Thing: Sportradar is number one for revenue and data provided in the U.S. market. The company provides data to 85% of all sports betting companies in the U.S., according to the IPO filing.
Sportradar offers pre-match data and odds, live data and odds and audiovisual content.
In 2020, Sportradar was responsible for over 1.9 billion betting tickets and processed over 21 billion betting odds changes from partners.
Sportradar has partnerships with Major League Baseball, National Basketball Association and the National Hockey League. Some deals are exclusive and many of them include media data rights. A deal signed in 2021 with the National Hockey League will give the league an ownership stake.
The company counts Bet365; Caesars and William Hill, both owned by Caesars Entertainment (NASDAQ: CZR); Draftkings Inc (NASDAQ: DKNG); FanDuel, owned by Flutter Entertainment (OTC: PDYPY); and Entain ADR (OTC: GMVHY) as sports betting customers.
Other customers for sports data include Apple Inc (NASDAQ: AAPL); Facebook, Inc. (NASDAQ: FB); Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL); Twitter Inc (NYSE: TWTR); Yahoo Sports; CBS Sports, owned by ViacomCBS (NASDAQ: VIAC); Fox Sports, owned by Fox Corp (NASDAQ: FOXA); NBC Sports, owned by Comcast Corporation (NASDAQ: CMCSA); and Walt Disney Co. (NYSE: DIS) owned ESPN.
Growth Ahead: Growth of sports betting legalization on a state-by-state basis could help a company like Sportradar as it will provide more data to additional betting platforms and apps.
Sportradar lists global expansion, expanding its business-to-business products, adding alternative content and services to its growth plans.
The company lost an exclusive NFL deal to rival Genius and will need to grow other items to potentially make up for the big loss.
Financials: From 2016 through 2020, Sportradar had compounded annual growth of 25%. Revenue in fiscal 2020 was $477.8 million.
The company reported six-month revenue of $321.0 million for the first six months of 2021, up 42% year-over-year.
Genius Sports had six-month revenue of $109.6 million, a year-over-year increase of 76%.
Sportradar posted a net income of $26.1 million in fiscal 2020 and had a net income of $29.9 million in the first six months of 2021.
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