Underdog

Prediction Markets · Sports Betting · Fintech

Acquisition

IG Group to buy Underdog for up to $1.3B, deal could top $2B with bonuses

The forecasting platform becomes a funnel meant to turn sports bettors into financial-market traders for its UK acquirer.

• IG Group agreed to acquire US daily fantasy sports and prediction markets operator Underdog for up to $1.3 billion: $1.1 billion upfront enterprise value plus a $200 million earnout for shareholders.
• Underdog began as a daily fantasy sports app, launched prediction markets in September 2025 and its own exchange in July 2026, making it the third-largest US prediction markets venue behind Kalshi and Robinhood.
• Separately, a management incentive plan could pay Underdog employees up to $850 million if the company hits $400 million EBITDA in 2028 and $700 million in 2029, pushing total potential consideration above $2 billion.
• IG's upfront equity payment of about $963 million will be split between 24.1 million new IG shares and $380 million cash, funded by a $450 million bridge loan from Barclays and Goldman Sachs, plus repayment of roughly $160 million in Underdog debt.
• Underdog has more than 11 million registered accounts and over 5 million depositing customers, averaging 952,500 monthly active users in H1 2026 and turning EBITDA positive at $59.6 million versus a $52.8 million loss a year earlier.
• The deal hands IG a vertically integrated US license stack spanning brokerage, exchange and clearing, letting it convert a young, high-engagement sports and prediction-markets audience into customers for its higher-margin financial trading products.
• The acquisition caps IG's strategic review launched in March 2026 and follows its 2021 purchase of tastytrade, deepening its US push as prediction-market rivals Kalshi and Polymarket have reached valuations above $10 billion.
• Completion is expected in late 2026 or early 2027 pending regulatory approval, and IG has paused its share buyback program until the deal closes.