Funko, the Everett, Wash.-based pop culture collectibles maker, has attracted a $263 million investment from a consortium led by The Chernin Group TCG), with investors who include eBay and former Disney Chairman Robert Iger. The transaction is a secondary offering.
TCG, an investment firm with interests in the media, commerce and technology industries, and the consortium are acquiring from ACON Investments 12,520,559 shares of Funko class A common stock, or 80% of ACON Investments’ stake in Funko, at $21 per share. The TCG consortium will own 25% of the company following completion of the transaction, the companies announced Thursday.
Along with eBay and Iger, Rich Paul, CEO and founder of Klutch Sports Group and head of sports at United Talent Agency, is also investing. TCG will also designate two directors to the board of directors, including Jesse Jacobs, TCG co-founder and partner and another person to be named at a later date.
As part of this investment, Funko and eBay are entering into a commercial agreement under which eBay will become the preferred secondary marketplace for Funko and the companies will also partner on creating exclusive product releases.
Funko’s headquarters and a flagship retail store are located in downtown Everett, north of Seattle. The company, which makes Pop! figurines and other merchandise tied to film, television, comics and more, was founded in 1998.
TCG believes the investment will help reinforce Funko’s leadership position in the pop culture collectibles space and advance the company’s strategic growth initiatives.
“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,” said Peter Chernin, TCG co-founder and partner. “There are many areas of identifiable growth across content, commerce, marketplaces, consumer products and technology that should drive substantial increases to Funko’s performance.”
The news coincided with Funko’s first quarter earnings report on Thursday, in which the company reported a net sales increase of 63% year over year to $308.3 million and net income of $14.5 million, up 31% from last year.