A detailed photo of the Fanatics apparel displayed at NFL Hospitality during the 2018 NFL Annual Meetings at the Ritz Carlton Orlando, Great Lakes on March 26, 2018 in Orlando, Florida.
Mark Brown | Getty Images
While Fanatics continues to delay a possible IPO, the sporting goods company is expanding its global operations, this time in China.
The Michael Rubin-led company is starting Fanatics China, a joint venture with investment firm Hillhouse Capital, an Asia-focused private equity fund with companies in the Asian e-commerce and retail sectors, the company told CNBC.
Sources close to the deal told CNBC Fanatics that the “venture will generate more than $ 1 billion in China alone.” The people asked to remain anonymous because the company does not speak publicly about the financial terms of the partnership.
With the pact, Fanatics could get closer to an IPO. When asked if an update was underway, a company spokesperson told CNBC, “While an IPO is clearly an available path to us, there is no update on a timeline.”
Fanatics China will be based in Shanghai, enabling the e-commerce powerhouse to open up its sports licensing market in the country to its more than 300 global partners, including corporate investors Major League Baseball and the National Football League, in addition to several US pro teams that want to grow their business in China.
One of the most licensed sports categories in China is soccer. Thanks to this partnership, Fanatics, which generates more than $ 3 billion in revenue, will better execute e-commerce partnerships with European clubs, including Chelsea, Manchester United, Paris-Saint Germain and Bayern Munich.
Founded by Chinese businessman Zhang Lei, Hillhouse also backs sports retailer Topsports International Holdings, which raised $ 1 billion in 2019 when it listed its Hong Kong IPO, Bloomberg said.
Topsports is one of the largest sports stores in China and operates more than 20,000 Nike and Adidas stores.
In 2018, the PE company went through a $ 10.6 billion raise and is now trying to surpass that with a $ 13 billion raise. It would be Asia’s largest US dollar-denominated fund, according to Reuters.
Quavo will perform at Michael Rubin’s Fanatics Super Bowl Party at the Loews Miami Beach Hotel in Miami Beach, Florida on February 1, 2020.
Kevin Mazur | Getty Images
Fanatics comes out of a 2020 where the company raised $ 350 million in a Series E (the latest round of funding) that increased its valuation to $ 6.2 billion. The Florida-based company expanded its parent umbrella with licensed sporting goods companies to bolster its vertical trading units, including the acquisition of licensed manufacturer WinCraft, CNBC reported in December.
Fanatics China will use the company’s e-commerce business model and Hillhouse’s local market knowledge to grow and maximize online market opportunities, build e-commerce sites for competitions and teams, design and launch new stores, and develop products for consumers and to produce in China.
With the addition of China, Fanatics expands its global presence outside of the US, as it also operates in the UK, Spain, Japan, Germany, Thailand, Australia and India.
Other Fanatics investors include SoftBank Group and e-commerce company Alibaba Group, co-founded by National Basketball Association team owner Joe Tsai.