The Chernin Group is leading a $263 million strategic investment in pop culture lifestyle brand Funko, with Bob Iger and sports agent Rich Paul among the stakeholders.
Peter Chernin and Iger, who ended his long run at Disney last year, are joining as advisers to the Funko board. Paul, CEO and founder of Klutch Sports and head of sports at UTA, is expected to draw on his expertise in the sports and music sectors to help Funko expand.
In the deal, the Chernin Group and its investors are buying more than 12.5 million shares owned by ACON Investments, or 80% of the company’s position. That will give TCG 25% of Funko once the transaction closes.
Along with Iger and Paul, other investors include eBay, which will become the preferred secondary marketplace for Funko. The two companies also will team on exclusive product releases, according to the official announcement.
Along with the new investment, TCG will designate two directors to the company’s board including co-founder and partner Jesse Jacobs.
After news of the deal emerged, shares in Funko jumped 27% in after-hours trading.
“We believe Funko is significantly undervalued in the public markets and at this highly attractive entry price provides a runway of opportunity and growth potential,” Chernin said. “There are many areas of identifiable growth across content, commerce, marketplaces, consumer products and technology that should drive substantial increases to Funko’s performance.”
TCG outlined a few strategic opportunities for Funko. The company sees potential to expand its intellectual property holdings, add adjacent physical and digital categories and brands to its platform, grow its direct-to-consumer business and extend its reach internationally.
Funko CEO Andrew Perlmutter said the buy-in from TCG “validates Funko as a leading lifestyle brand with a pulse on what’s trending in pop culture.” The investment group brings “expertise, deep understanding of the markets we serve, and track record of working successfully with companies in the pop culture and entertainment space to create value and drive growth.”
In fiscal 2021, Funko revenue rose 58% to more than $1 billion. Earlier today, the company reported a 63% spike in revenue for the first quarter, to $308 million. Adjusted EBITDA, which hit $150 million for all of 2021, increased 22% in the first quarter.
Chernin’s firm, which he launched after winding down his long run in the exec suite at Fox, has made investments in firms like Crunchyroll, Goldin Auctions and Exploding Kittens. The common thread of the investments is an avid and highly engaged customer base.