IG Group to Acquire Underdog in $1.3 Billion Deal

On Thursday afternoon, London-based IG Group, a financial technology company, announced it was buying Underdog for $1.3 billion. Underdog rose to prominence as a DFS and best-ball fantasy platform and grew into something massive, including buying Aristotle Exchange DCM and Aristotle Exchange DCO to launch its own CFTC-regulated prediction market platform.

According to the announcement, the $1.3 billion "comprises upfront consideration based on an enterprise value of approximately $1.1 billion (to be settled partly by the issuance of IG ordinary shares) and an earnout of approximately $200 million payable to Underdog's shareholders (the "Earnout")."

Along with the acquisition, Underdog employees will participate in a "management incentive plan with a maximum potential payout of $850 million, self-funded from Underdog's earnings and conditional on strong outperformance." To reach the maximum amount, Underdog must deliver EBITDA of at least $400 million in 2028 and $700 million in 2029. 

Underdog CEO: Deal Will Accelerate Growth

With this acquisition, the Board of IG Group believes the deal will more than double its United States revenues, make it a leader in prediction markets in the United States, expand beyond sports, and more. 

Here's what Underdog CEO Jeremy Levine had to say about the deal: 

“We built Underdog by creating the best experience for fans, and we've proven we can build the best products no matter how the regulatory landscape shifts. It’s why we've taken off in prediction markets since we launched last year.

“Now, with our own exchange and by joining IG, we're going to take an incredible leap in what we can offer customers and make Underdog the place to make predictions on sports and beyond.

“IG’s scale, expertise, resources, and reach are going to unlock our potential, expand what we've built, and bring our products to more audiences. I couldn't be more excited about what we're going to do together.”

According to IG Group's estimates, Underdog is the third-largest prediction market by US-regulated notional volume flow, trailing Kalshi and Robinhood. 

IG Group Sees Opportunity in U.S. Prediction Markets

Here's what the CEO of IG Group, Breon Corcoran, formerly of Paddy Power Betfair, said about the deal: 

“Technology is reshaping the large, high-engagement markets in which IG operates – and increasingly bringing them together,” Corcoran said. “Underdog puts us at the front of that convergence: a product-first team, a leading daily fantasy sports franchise and a full license stack that together give us a differentiated position in US prediction markets. It expands both our addressable market and our growth trajectory. We are delighted to welcome Jeremy and the Underdog team to IG.”