Draftea, a Mexican startup and “the first daily fantasy sport in the Spanish-speaking world,” has managed to have Kevin Durant and Cristiano Ronaldo among its investors and secured a deal with the NFL, all in a matter of months. We spoke with their CEO to learn more about them.
“Like all good things, it was slow-cooked,” says Draftea‘s CEO and founder when asked how they managed to close a deal with the NFL.
It was one of the milestones of this daily fantasy sports platform, launched only in February. It is the first platform of its kind in Mexico and one of the first in the region (there are a couple in Brazil). The agreement, he explains, consists of being commercial partners with this competition through a product, NFL by Draftea, which has allowed users to have the iconic football league in the app, which already had Mexican and international soccer.
“They [the NFL] were very impressed with the quality of our team and the quality of the product we have in such a short time. And they were always very excited to do something with us because they understand the Latino market,” Jaime said.
Daily fantasy sports (DFS) like Draftea are an accelerated and entirely digital version of fantasy sports, where participants, choosing players from a professional sport, put together virtual teams that compete against each other based on the performance that these players are having in real life.
Traditional fantasy sports are played on a seasonal basis. DFS, on the other hand, can be played weekly or daily. They are usually pay-to-play: winners receive a share of the pot, funded by the entry fee.
The initial big push for DFS in the world was given by the U.S. company FanDuel, founded in 2009. But in recent years, the business has exploded, attracting leagues, teams, and athletes who are rushing to join this trend as partners or investors.
Draftea, which publicly emerged in February in Mexico after announcing its sponsorship of the national soccer team, was born to capture this local interest—and in the future, regional and Spanish-speaking markets as a whole— in this type of games.
Jaime says platforms like theirs produce a unique connection with fans: “We allow you to have a certain skin in the game. We allow you to take your passion to another level without it being just the result that matters. Whether your favorite team won 2-0 or lost 2-0, that’s only what happens when the game is over. With us, every microsecond, every play, every micro-moment counts. We call it the game within the game. If Cristiano Ronaldo made 14 passes, that would give points. If César Azpilicueta, another of our investors, made three slide tackles, that’s points. If Travis Kelce had 178 yards, that gives points. It’s this connection that the fan has not only with the sport, leagues, or clubs, but they take it to a personal level. And then they start following more players, seeing the sport with another level of passion.”
Alán Jaime had a brief stint as a soccer player in the Mexican third division before studying law, working as a lawyer, and years later ending up doing an MBA at Stanford, which marked his entry into the world of startups and technology.
“With my co-founders and the team we put together at the beginning, the idea was always how we take Draftea to be the platform that allows sports enthusiasts to take their passion to another level and how we allow them to put together their dream teams and compete against other people for glory and for money.”
The startup founded by Jaime had a US$13 million seed round led by Kaszek in January, a US$4 million seed round in March, and a US$20 million Series A led by Stepstone Group in September. Apart from the amounts and the VCs’ status (they are also backed by Sequoia, which made its first investment in a startup based in Mexico), the involvement of world-class athletes as angel investors was especially striking: Travis Kelce, Paul Gasol, Iker Casillas, Cristiano Ronaldo, Kevin Durant, and the manager Jorge Mendes among them.
-Do they participate directly as angels, or do they work with someone who represents them?
-I would tell you that each case is different. Some of them invest directly with a personal check. Some do it with funds they have created. Some are in partnership with their agents or others, but most do it personally; for us, it’s a significant thing. Because it’s not just us who know this is the future of sports. Or Kaszek or Sequoia or Bullpen or Courtside or Stepstone, our investors who are funds, know that this is the future of sports. The athletes themselves know that this is the future of sports. So the best athletes in the world also want to be part of Draftea and want to be part of this dream team that we have put together because they know that the interaction and the last point of contact with the fan today is on platforms like ours, where there is a connection between the athletes, the clubs, the leagues, the sports, and the final fan.
-Were you a daily fantasy sports player?
-I’ve been playing for 20 years. I played fantasy sports first when it wasn’t digital. Then I was very into Champions League fantasy sports when it was already digital. And then NFL, Premier League, and Spanish league. And then that’s when I got more and more and more into it. And I’m passionate about what we do. I would tell you that’s what makes me most happy and content: to be able to work every day on something that I’m personally passionate about in a big way.
-When building Draftea, were you inspired by some of the big DFS out there?
-I would say that we love to learn from others. We don’t like to be the X of LatAm. At the end of the day, we are a daily fantasy sports company that understands our market very well, and we understand the fans better than anyone else, and we want to allow them to have an experience like they have never had. And while Nigel Eccles, founder and former CEO of FanDuel, is on our board and our advisor and investor, and we learn a lot from him, we don’t like to copy anything anyone else does. We respect a lot what DraftKing or FanDuel does, or Dream11 in India, but in the end, we focus on our product to become the best DFS in the world.
-What can you tell us about the relationship between Mexicans and the NFL? In other parts of LatAm, the NFL is something more foreign.
-There are 50 million NFL fans in Mexico, which is a lot. And there are also like 20, like 18 or 20 million of those, they are avid fans, that is, they consume the NFL in different ways. And so the fan in Mexico is a multi-sport, multi-league fan. You walk down the street in Mexico City and ask someone if they have their favorite soccer team in Mexico, Spain, England, the NFL, the NBA, and baseball in the US. And then there is an attachment to more than one sport, to more than one league. We are absolutely passionate about sports, and it’s something that we love because we allow our users to play more than one sport.
-What metrics can you share so people can get an idea of the growth or the magnitude that you are having?
-We’ve been growing double digits week after week since we launched in a big way back in July, and we have tens of thousands of people playing on the platform, so we are very happy and excited about what we’ve been doing. But as I always like to say: this is just the beginning. In the end, there is still everything to do, and there is still everything to keep creating and growing and improving and doing more sports and more countries.
-Why are you growing so fast?
-Because there is an important passion for the sport. People are passionate and want to take their passion to another level. And people love the product we offer because, in the end, we understand the user because we are users ourselves.
-Do you have an expansion plan or any second market you intend to address?
-We do it in a very well-thought-out way, but we would like to expand into the Spanish-speaking world, go to other countries in Latin America and then go to Spain and then continue to grow.
-Is it challenging to expand because of regulatory matters and things in each market?
-It has its science and its art, and you have to measure well and understand well the science part and the art part and also do it at the right time. So we like to have a very well thought out and well-done study before making any decision. So I would say that today we continue to grow in Mexico, and we continue to grow the market in Mexico, but we are already thinking about where we want to go next.
-What other startups from LatAm do you admire?
-I admire many. I admire the guys at Fintual, the Fintual team led by Pedro [Pineda]. I think it is very impressive what they have achieved. They are crazy geniuses, good at many things, and I love learning from them. I talk to them a lot and learn a lot from them. We’re colleagues at Sequoia, we’re colleagues at Kaszek, and we’re also friends now, so we have common interests. We are very different, but different people learn from each other. And I got to learn a lot from them, and I love it. And there are others. There are several entrepreneurs that I love learning from. Arturo [Sánchez], from Sofía, the insurtech in Mexico. Daniel [Vogel], from Bitso. I love talking to different founders and learning from them because, in the end, we are all together in this ecosystem, trying to improve the region and do new and innovative things.
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