Wednesday, June 3, 2015

Kynetic's Fanatics.com raises $170M, plans seasonal hires

Asian investors expect rapid growth from Conshy-owned sports retailer

Kynetic's Fanatics.com raises $170M, plans seasonal hires

Fanatics.com, the pro- and college-label sports clothing sales and warehouse operator owned by Michael Rubin's Conshohocken-based Kynetic group, will use proceeds of its recent minority share sale to build a West Coast warehouse, boost inventory at its Jacksonville headquarters and its new $35 million, 500,000 sq ft + operation in suburban Columbus, Ohio, president Jamie Davis tells me. The expanded company also plans 2,000 seasonal hires to handle Christmas orders this fall.

Fanatics raised $170 million from a 6% stake to Singapore national investment fund Temasek and Alibaba, China's eBay, last week. That follows last year's $150 million, 10% sale of shares to U.S.-based Insight Venture Partners and Andreesen Horowitz -- implying Fanatics' value has doubled, to over $3 billion, in just a year. The company has not filed Form D statements confirming the investments under its name or Kynetic's. Fanatics currently employs around 1,400, Davis said.

Davis says proceeds from the Asian investors will also be used"for setting up our own businesses around the world" and acquiring rights to foreign teams. Fanatics also plans to spend more on promotion: "You will see us doing more marketing through traditional sports networks, print and radio." Besides its direct online and warehouse business, Fanatics operates the online retail sales sites for NBC, ESPN, CBS, Comcast SportsNet, as well as the NFL, MLB, NBA, NHL, NASCAR, and parts of the NCAA. The company says sales will top $1 billion this year; so the $3 billion valuation implies investors expect more rapid growth. Founder Rubin sold other parts of his previous, public company, GSI Commerce, to eBay three years ago for $2.4 billion.

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano