Profitable Longtail Sports Steamer Raises ‘High Eight Figure' Series D

Profitable Longtail Sports Steamer Raises ‘High Eight Figure’ Series D

FloSports announced the closure of its Series D investment round on April 1. 

The profitable sports media platform (it does editorial, social, and feature films, in addition to streaming) raised a ‘high eight figure number’ so it could pay down debt, expand into some new verticals, remain acquisitive, and expand its pursuit of a potentially lucrative new revenue stream.

Dream Sports, one of India’s leading sports tech startups, led Flo’s latest round and will aid its growing foray into gaming. Dream joins a cap table that also includes Causeway Media Partners, Warner Bros. Discovery, DCM Ventures, Bertelsmann Digital Media Investments, and Fertitta Capital.

“One of the things strategically we've talked about but never had the resources or the time [to pursue], is the fantasy sports aspects of these verticals,” Mark Wan (managing partner, Causeway Media Partners) said. “We have [hardcore] fans already [engaged]. It’s a natural extension.”

Remember, the industry’s existing market leaders do not traffic in long-tail sports.

FloSports exists to super-serve underserved fan communities. It broadcasts live game/match content across 25 sports.

The company got its start with Olympic sports that were without a place in the established pay TV ecosystem (think: track, gymnastics, wrestling). It has since embraced a host of other sports that fail to receive adequate coverage.

“We went into dirt track racing and found an incredibly passionate fan base there,” Wan said as an example.

The core premise behind Flo’s business is simple. Avid fans, regardless of the sport, consider live games/events ‘must see’ content and will pay a premium to consume them.

So, it rolled up the broadcast rights to more than 40,000 events across 20 verticals over the last decade (some deals include production, others focus exlusively on distribution). 

The company’s thesis has played as expected.

“When [Causeway initially invested in March 2015], Flo had 7,000 subscribers,” Wan said. “We're more than a 100x that today.”

Flo currently has over one million paying subs. That figure represents a collective of small, passionate fandoms.

“We [will] have 800 viewers show up for some of our live events,” Wan said. “But they're [each] paying $30 a month because they can't get that content anywhere else.”

The company has doubled its revenues within the ‘last three’ years.

“We've gotten better, not only bringing on [new] subs, but maybe more importantly [with] retention,” Wan said.

Investments in product tech and content has improved/enhanced the viewing experience. 

While “the Stanford Invitational may be popular, that alone isn't enough [to support a track vertical],” Wan said. The company has come to recognize it needs “a series of [related] rights in order to have enough critical mass to make [the costly subscription] interesting [enough] for [the target audience].”

Growing adoption of company’s ‘meet management’ software has helped too.

“Because it's our software [aiding event operators], we can provide information [like finishing times and places] to viewers on a real time basis,” Wan said.

Flo’s burgeoning O&O event business is contributing to its top line growth. The company produced, hosted, ticketed, marketed, and broadcast ‘FloWrestling Night in America’ in February.

While many of the niche properties on the platform could reach a broader audience in front of a paywall (think: YouTube, FAST), Flo’s pitch to rights owners –above and beyond the guaranteed dollars– focuses on audience demographics.

“All your super fans are already [subscribers to the service],” Wan said. So, “we're going to put [the games/events] in front of the folks who really care about [the sport. And] they are going to be able to [easily] find you.”

The company works with rights owners and operator partners to promote events and try to grow the property and exposure to it (think: showcasing content across popular social and streaming channels).

While Flo broadcasts 25 sports today, Wan maintains there are at least 100 more it could expand into before reaching a ceiling.

“We don't see any near-term limits on what we can do or how we can grow this business,” he said.

Particularly, as its economics continue to improve, and with increasingly fewer competitors bidding for the rights it wants. 

“As we get more [content within] each vertical, the retention numbers get better and better,” Wan said. People “subscribe [once] and they stay around for years.”

In fact, Flo even managed to grow its subscription revenues during the pandemic when there were no live sports (in the low single digits).

The moat the company has established makes it unlikely a challenger is coming up behind them.

“There’s no single contract [amongst its ~15,000] that represents a significant portion of [the subscriber base],” Wan said. “So, to come in and disrupt our business, or even to replicate it, is really hard.”

Most of its contracts, outside of the ones signed with new properties/operators, run three to five years in length.

The breadth of Flo’s content would seemingly make it a potential acquisition target for a tech provider who wants to make broad play into sport.

“It will be a very good fit [for] every one of those [companies and] even [the] hardware platforms like Roku,” Wan said.

Flo just isn’t in any rush to exit. It doesn’t expect to require any additional capital, and company projections have subscription figures continuing to climb in the years ahead.

“We’ll be patient,” Wan said. “We think there's a long growth path ahead of this business.”

Top 5 Sports Business Headlines
Click here to subscribe to Sport & Story Daily and never miss a story.

• Pope Leo XIV Brings Hope to Chicago Sports Fans, and the Knicks for Their Villanova Ties

• Are American Bettors Losing Interest In Basketball?

• Google’s YouTube Favored to Stream Exclusive NFL Game for First Time

• FCS Heading Toward 12-Game Regular-Season Schedule Starting in 2026

• Shohei Ohtani Could Have Landed 15-year deal