Benzinga routinely examines a stock that might be considered a little under the radar. You may have never heard of the company before, but chances are you're pretty familiar with the line of work it's in. We call these the "things behind the thing."
What Happened: Genius Sports is being valued at $1.5 billion in a SPAC merger deal with dMY Technology Group Inc II DMYD.
This is the second SPAC done by the group, which is also bringing sports betting company Rush Street Interactive public via dMY Technology Group DMYT. The deal is being done at eight times 2021 estimated revenue of $190 million.
Shareholders of DMYD will own 17% of the new company that will trade as GENI on the NYSE.
About Genius Sports: Genius Sports acquires data from sports events and then supplies it to partners, which include many of the largest sports betting companies. The company is on pace to provide data for 240,000 events a year, which includes being the official provider for 170,000 events.
Genius Sports has deals in place with the NBA, NCAA, FIBA, FIFA, EPL, PGA and NASCAR. Customers for Genius Sports include DraftKings Inc DKNG, FanDuel, William Hill, Skybet, Bet365, BetFair, Paddy Power, Bet America, Twinspires, Caesars and BetMGM.
Competition: Genius Sports is the number one sports data rights owner with a market share of 40%. Along with Sportradar, Genius Sports is one of only two full-service providers of this scale in the sports data market.
Sportradar was valued at $2.8 billion in 2018 and its valuation is said to have risen since that funding round. The company is now rumored to be considering an IPO or SPAC deal.
Growth: Revenue is expected to grow at a compound annual growth rate of 29% for Genius Sports. The company has 60% recurring revenue.
The sports betting market is expected to grow at a compound annual growth rate of 31% in the U.S. from 2020 to 2025. Genius plans on growing by pursuing additional rights and marking strategic acquisitions.
DMYD Price Action: Shares of dMY Technology Group II closed up 1.8% to $11.60. Shares have traded between $9.85 and $11.65 over the last 52 weeks.
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