Underdog’s $1. 3B Sale Agreement Reveals New Details About Company
Betting companyUnderdoghas agreed to sell to IG Group Holdings, a publicly traded company from London, for as much as $1. 3 billion in stock and cash based on performance incentives. IG Group will pay at least. . .
Betting companyUnderdoghas agreed to sell to IG Group Holdings, a publicly traded company from London, for as much as $1. 3 billion in stock and cash based on performance incentives. IG Group will pay at least $1. 1 billion. There’s also a management incentive plan that could give “eligible Underdog employees” up to $850 million from the company’s future earnings, “conditional on strong outperformance,” per terms of the deal disclosed Thursday. As part of the agreement, IG Group will repay Underdog’s existing debt, expected to be approximately $160 million. IG Group said Underdog’s recent prediction market push, which includes launching its own exchange, is a key appeal. Federal regulationof exchange betting has opened the door for companies to facilitate bets in all 50 states rather than being limited by the laws of individual states—a lucrative opportunity that has seen Kalshi and Polymarket rise to valuations above $10 billion. In addition to prediction markets, Underdog also still runs dailyfantasy sportscontests. Underdog will operate as a standalone business with its own brand and management team under IG Group’s umbrella, according to the announcement. IG Group CEO Breon Corcoran had a small equity stake in Underdog, acquired before he was named chief executive in 2024, according to the announcement. The IG board was aware of the investments, made in 2021 and 2023 and totaling less than 0. 5% of Underdog, and approved his participation in the negotiations (though he recused himself from the board’s ultimate vote). He will be treated like all the other Underdogs shareholders in his class, the company said. Because IG Group is publicly traded, it released financial and user engagement details about Underdog that were not previously known. For example, IG Group said Underdog averaged 952,500 monthly active users in the first half of 2026, up from 835,700 in 2025. Underdog posted positive EBITDA (earnings before interest, taxes, depreciation and amortization) of $59. 6 million in the first half of this year, compared with negative-$52. 8 million in 2026. IG Group has entered a $450 million short-term leveraged loan agreement with Barclays Bank PLC and Goldman Sachs to help fund the deal. The deal is subject to regulatory review. Last year, Underdog received commitments on a $70 million funding round at a $1. 23 billion pre-money valuation. AsSporticorecently reported, Underdog hasused the unique strategyof providing injury and other player updates on social media to become a household name insports betting. The company, founded in 2020,cut staffearlier this year, attributing the reductions to its increasing allocation of resources toward prediction markets. As of mid-July, Underdog was the fourth most popular prediction market destination in the U. S. among entities regulated by the Commodities Futures Trading Commission (CFTC). The company is migrating from a broker-centric approach to prediction markets in which it routed all bets through third-party exchanges to a proprietary strategy where it processes most (if not all) wagers itself. Underdog bought Aristotle Exchange earlier this year for that purpose. An increasing number of prediction market businesses are pursuing exchange ownership, even if it means more upfront costs and maintenance duties, because it grants them greater product and user pricing control. While Underdog is currently focused on sports, IG Group’s sale announcement said Underdog could eventually expand its wagering menu to include topics like election betting and betting on cryptocurrency price movements. Political betting is not currently allowed on traditional, state-regulated U. S. sportsbooks. The ability to offer wagers on elections potentially expands the number of potential users Underdog will be able to reach, as some people who aren’t sports fans may be interested. But prediction markets do face long-term risk, as states and tribal groups challenge whether the federal government should be able to govern sports betting, which remains the core part of almost all prediction market apps. The matter islikelyto be settled at the U. S. Supreme Court. Eben Novy-Williams contributed to this report. (This story has been updated after the 12th paragraph with additional information on Underdog. )