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Underdog is going overseas.
The New York-based company has been sold to U.K.-headquartered online trading firm IG Group for up to $2.15 billion in total consideration, according to a Thursday press release. That total comes from $1.1 billion IG Group is paying upfront, a $200 million earnout payable to Underdog shareholders, and a maximum of $850 million that could go to “eligible Underdog employees” depending on the company’s future performance.
In order for the $850 million figure to hit, Underdog must deliver earnings of at least $400 million in 2028 and $700 million in 2029, before interest, taxes, depreciation, and amortization.
IG Group, founded in London in 1974, said earlier this month it intends to reincorporate in Jersey, a self-governing island in the English Channel. With its latest acquisition, it is betting on Underdog securing a permanent spot as one of the top prediction-market platforms in the world. Analysts at BofA Securities recently said Underdog has the third-highest U.S. market share in the industry, behind Kalshi and Polymarket.
“The acquisition of Underdog establishes IG as a leader in U.S. prediction markets, one of the most significant opportunities across trading and entertainment, and accelerates our growth in the world’s largest and fastest-growing retail trading market,” IG CEO Breon Corcoran said in the press release.
The deal comes amid a year that has featured significant change for Underdog, which launched prediction markets last September through a partnership with Crypto.com. In March, the company laid off more than 20% of its total workforce as part of a shift in focus from traditional sports betting and paid daily fantasy draft contests to prediction markets.
Shortly after the layoffs, Underdog brought its prediction-market infrastructure in-house through the acquisition of Aristotle Exchange DCM and Aristotle Exchange DCO, which are registered with the Commodity Futures Trading Commission (CFTC), the federal regulator that oversees prediction markets.
Underdog cofounder and CEO Jeremy Levine said in Thursday’s press release that the company is primed to “take an incredible leap” under the ownership of IG.
“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,” he said.
IG expects the acquisition to pay off in a big way, saying the addition of Underdog will more than double its U.S. revenues and increase U.S. monthly active customers “more than tenfold.” According to the press release, Underdog’s prediction-market business boasts more than one million average monthly active users and over five million customers who have deposited money into the platform.
For the time being, Underdog will continue to operate as a standalone business within the IG portfolio, retaining its own brand and management team.
The companies declined to comment beyond the press release.
