With a product based on on sports, gambling, chauvinism, and limited attention spans, DraftDay is the stereotypical man’s company. But an $875,000 investment from the Groupon founders’ Lightbank fund and a hugely successful roll-out says the the fantasy sports company need not apologize for knowing its market.
DraftDay is based on the premise that months-long fantasy sports seasons are more of a burden than many fans want to assume. That’s why the Chicago-based company offers single day fantasy competitions for basketball, football, baseball, and hockey. How’s that for applying a bit of the Groupon daily deal magic?
DraftDay launched its site in September with an extremely popular DraftDay Perfect Lineup football game that offered $1 million in prizes prize. As of the beginning of this month, the registered users had grown above 15,000 with more than 20 percent playing for real money.
The platform is now hosting more than 10,000 lineups per week. Nearly 100 percent of its members have participated in the NFL fantasy season, with nearly 50 percent competing in NBA contests, 35 percent in MLB, and 10 percent in NHL.
On week ago, the company hosted its first “DraftDay Online Championship of Fantasy Sports.” The five-day event consisted of eight fantasy baseball contests totaling $50,000 in prizes. (This number was increased from $40,000 due to excessive demand). Buy-ins ranged from $10 to $200, with participants qualifying for the event based on performances earlier in the season.
Over 2,500 “real money” lineups were submitted for the series and the eventual winner (a 29-year old statistician from Alexandria, VA) took home nearly $6,000 while visiting his girlfriend’s extended family for the first time. He will now go on to play SiriusXM host Kay Adams mano-a-mano for an additional $1,000.
The fantasy gaming startup was founded by Taylor Caby and Andrew Wiggins, both former professional poker players. Previously, they co-founded a multi-million dollar business called CardRunners from their college dorm rooms.
Unlike other forms of online gambling, fantasy sports is exempt from the most restrictive of online gaming laws. The company makes its money by taking a six to ten percent cut of the total pot, depending on the cost of buy-in (which ranges from $1 to $500). DraftDay has yet to serve advertising on its site, although its founders concede this might change in the future.
With a total of 35 million fantasy sports players in the US, the founders describe “reaching scale” as having “mid-six figures users.” Due to the nature of their product, the founders call DraftDay only “somewhat competitive” with season long games, believing that they’re targeting more casual players.
The ability to play for real money or pride keeps the potential user base as wide as possible.
In the future, DraftDay plans to run its “Online Championship of Fantasy Sports” series with other sports. In September, it plans to leverage overlapping professional sports seasons to offer a series with Fantasy Football and Fantasy Baseball games simultaneously.
Oh, and what about the chauvinism, you ask? Watch the following promo video in which the company dares its audience: “Go on, play the field. Whatever happens, it all starts over tomorrow.”