Sportadar Group rang the opening bell at the Nasdaq Stock Exchange on Tuesday, September 14th, to officially mark its debut as a Nasdaq-listed entity following the completion of its IPO. The company is one of the world’s leading data analytics, and entertainment service providers. It has gone public under SRAD as its ticker symbol, with an IPO pricing of $27 a share. In this venture, Sportadar managed to raise over $670 million, ultimately placing the company’s value at a whopping $7.98 billion.
The sports and data analytics juggernaut sold a total of 19 million Class A shares, where underwriters held the option to buy 2.85 million more shares in a 30-day window. Meanwhile, a consortium of investors spearheaded by Todd Boehly, the co-owner of LA Dodgers, bought 5.98 million shares worth a total of $159 million.
Following the Nasdaq launch, Sportradar’s founder and CEO Carsten Koerl voiced his enthusiasm in a briefing via a video call from a Manhattan conference room, saying:
“It is difficult to describe how much it means. I think it’s an inflection point and the next big milestone we have reached with the listing. We have a public face now, and that is super helpful for attracting more talent to our business, and of course, at the IPO, we also get some proceeds, and we can use this to invest in growth.”
Betting Big on the Burgeoning US Data Analytic & Tech Services Market
After launching on the Nasdaq on Tuesday, Sportradar’s IPO price spiked as massive buy orders trickled in. After that, however, the share price slipped to 8%, finishing at $24.81 by the end of the first day of trading.
To date, Sportradar Group has been offering data analytics and a range of other technology and entertainment services to 900 sportsbook operators and 350 companies in the media industry. Every year, the Switzerland-based brand also covers roughly 750,000 events across the globe.
Per company reports, Sportradar’s sales in 2020 were just shy of an impressive $478 million, with most of the revenue coming from the betting services that it offers out of the United States. The United States, where the Swiss company is the most dominant data provider to sports betting operators, only generated 11% of its overall sales revenue last year.
But then, as the US sports betting market continues with its rapid growth, industry analysts project that business for companies like Sportradar will be booming. Right now, 26 states and Washington DC have active legal sports betting markets. As such, Koerl is pretty optimistic about US prospects, a sentiment which he voiced in his briefing, adding that:
“Looking to the US market growth opportunity, it is by far the biggest growth market worldwide when it comes to sports betting. The US sports betting market was about $1 billion total in 2019 and can grow to $23 billion by 2031, according to data from Gambling Compliance Monitor, included in the prospectus. That is the most fascinating market opportunity. We got a lot of questions from investors around this. We luckily can demonstrate, with our scale and our results, that we’ve already managed to leverage this in the US.”
Second Time Was the Charm Sportradar’s Challenging Public Listing Efforts
Sportradar’s entry into the Nasdaq stock market as a publicly-traded company wraps up a process that the company began mid-last year. Initially, the sports and data giant had explored a business combination with a special purpose acquisition company (SPAC) to try and escape the intricacies of leading the traditional IPO path.
However, discussions with Horizon Acquisition II, a SPAC founded by Boehly, failed to materialize even after signing an official letter of intent to merge back in March. Owing to difficulties in the finance sector resulting from pandemic shortfalls, the two entities could not find interim PIPE investors to financially back the deal’s closure.
Faced with the said difficulties, Eldridge Industries joined forces with Radcliff Management to lead a group of investors in purchasing IPO shares. Eldridge is a privately held company that Boehly owns, whereas Radcliff Mgmt. is currently one of Sportradar’s biggest shareholders.
As part of his briefing, Koerl demystified the fact that Sportradar shouldn’t merely be regarded as a data provider of events. According to him, the company has barely scratched the surface of its potential as a tech business at the forefront of the industry’s evolution. He said:
“Everybody needs to understand that sports data is a raw material, a fuel, the same like audio visual rights. The real value is generated in collecting more and more data, putting it into an engine, processing this with algorithms, and then applying machine learning to power future services for teams and leagues, sports betting operators, and for sport entertainment. That is the ecosystem we are speaking about, and it will provide enormous opportunities.”