Softbank Makes $1B Investment in Fanatics

Softbank Group Corp., a Japanese telecommunications and internet corporation, is investing $1 billion in Fanatics Inc., an online retailer of licensed sports apparel, as part of a funding round that values the sports e-commerce firm at $4.5 billion and will increase its total funding to around $1.8 billion.

The deal will come out of Softbank’s $100 billion tech-focused Vision fund. The new funding  is expected to close later this month.

About Fanatic

Fanatics Inc. started two decades ago in Jacksonville, Florida. Since then, it has grown into practically every aspect of the sports apparel industry. It has become the leading sports merchandise licensor that handles e-commerce sales for teams and sports leagues worldwide. It works with Major League Baseball and the National Football League as investors, along with several venture capital firms and technology companies.

It has established a business that it expects will make $2.2 billion in revenue this year on the back of licensing deals with major American sports leagues and big collegiate programs that permit it to sell and manufacture team jerseys and other clothing through its own sites and through the online shops of teams and leagues.

Those deals support the e-commerce firm against Amazon, which does not have direct merchandise deals with the leagues.

Currently, the firm sells products ranging from shirts and jerseys to branded bobble-heads, lawn chairs, mugs and grills. It also has rapidly increasing memorabilia business with sports stars, including Stephen Curry, Ronda Rousey, and Peyton Manning.

Softbank Vision Fund

Softbank, run by Japanese billionaire Masayoshi Son, is doing the bulk of the $1 billion investment out of its $93 billion Vision Fund, the world’s biggest private equity fund. Its backers include Saudi Arabia’s sovereign wealth fund, Abu Dhabi’s Mubadala investment Co, and Apple Inc.

It has been involved in a number of recent deals, including acquisitions of two robotics businesses from Google’s parent company Alphabet Inc. Other investments in the Vision Fund include stakes in chip designer ARM Holdings, and satellite startup OneWeb.

Over the past six months, Softbank’s Vision Fund has explored investments in different industries such as ride-hailing, co-working, robotics, agriculture, health care and autonomous driving.

Meanwhile, the latest deal with Fanatics suggests that Softbank’s CEO is looking to compete with the likes of Adidas, Nike, and Under Armour when it comes to licensed sports gear. Fanatics is not the first e-commerce that Mr. Son has made an investment into; in fact, he was an early backer of China’s Alibaba, which is also an investor in Fanatics.

Softbank Stock Performance

By 3:00 PM GMT +9, Softbank Group Corp traded 1.48%, or 132, to 8,806 JPY. It opened in 8,886 JPY, with a session high of 8,888 JPY and a session low of 8,771 JPY. Its market capitalization was 9.70 trillion, with a P/E ratio of 14.32 and a dividend yield of 0.50%.

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