IG says acquisition will accelerate its growth in the world’s largest and fastest-growing retail trading market

London-listed financial trading provider IG Group is betting on the continuing growth of prediction markets with a $1.3 billion deal to acquire Underdog in the United States.

IG Group chief executive Breon Corcoran, who previously served as CEO of Paddy Power Betfair and was personally an early investor in Underdog, said the proposed acquisition will establish IG as a leader in prediction markets in the United States.

IG Group will pay up to $1.3 billion to acquire Underdog, comprised of an upfront consideration of approximately $1.1 billion and an earnout of approximately $200 million. 

Of the initial consideration, $380 million will be settled in cash, subject to adjustments, with the remainder to be settled through the issuance of 24.1 million new ordinary shares of IG.

The initial consideration is equal to 2.4x Underdog’s net revenue of $466 million in the twelve-month period ended June 30, 2026, with revenue for the year up by 21 per cent versus the prior year.

Underdog’s management team will also be eligible for a maximum potential payout of $850 million under a proposed management incentive plan which would be self-funded from Underdog’s earnings and conditional on strong outperformance.

In order to achieve the maximum payout under the incentive plan, Underdog’s management will have to deliver EBITDA of at least $400 million in 2028 and $700 million in 2029.

IG chief executive Corcoran said: “Technology is reshaping the large, high-engagement markets in which IG operates – and increasingly bringing them together. Underdog puts us at the front of that convergence: a product-first team, a leading daily fantasy sports franchise and a full licence stack that together give us a differentiated position in US prediction markets. It expands both our addressable market and our growth trajectory.”

IG Group expects the acquisition to be broadly neutral to adjusted earnings per share in year one, rising to double-digit per cent accretive by year three.

In the first half of 2026, Underdog had net revenue of $250.1 million and EBITDA of $59.6 million, with 952,500 active average monthly users. Of the H1 EBITDA total, $46 million was earned in Q2.

The company noted that Underdog’s revenue streams are largely uncorrelated with IG’s existing business, providing diversification alongside strong growth.

Underdog was founded in 2020 as a daily fantasy sports operator and went on to raise Series B financing of $35 million in 2022 to expand into sports betting. The company conducted a Series C funding round in March 2025 to raise a further $100 million at a $1.2 billion valuation. 

Underdog relinquished its US sports betting licenses in 2025 as it turned its focus to prediction markets, initially launching event contracts in September of that year in partnership with Crypto.com.

In March, Underdog acquired CFTC-registered Aristotle Exchange DCM and Aristotle Exchange DCO, enabling it to offer its own prediction market exchange.

Co-founder and chief executive Jeremy Levine commented: “We built Underdog by creating the best experience for fans, and we’ve proven we can build the best products no matter how the regulatory landscape shifts. It’s why we’ve taken off in prediction markets since we launched last year. 

“Now, with our own exchange and by joining IG, we’re going to take an incredible leap in what we can offer customers and make Underdog the place to make predictions on sports and beyond. 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. I couldn’t be more excited about what we’re going to do together.”

The acquisition is expected to complete in late 2026 or early 2027.

Shares in IG Group plc. (LSE:IGG) were trading 6.1 per cent lower on the news at 1,602.00 pence per share in London early Friday morning.