#87 💸 Main Sources of New Capital into Sports

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We’ve been saying for a while now that the general investment climate in SportsTech is pretty cold. But there is still cause for optimism as new money continues to flow into sport from various directions.

The trickle down effect is bound to follow as sports orgs will lean towards innovation to establish differentiation and enhance their products. The next wave of capital is coming, just have to hold on till then.

As always, Happy Friday.

Main Sources of New Capital into Sports

Despite an ice cold SportsTech startup investment environment, the outlook for sports in general remains positive.

And there are many factors within the sports world that are contributing to this sentiment. The rise of women's sports, unlocking the power and reach of college athletes through NIL, the wave of sports betting legalisation and various others. While those come from within sports, there are major drivers outside of sports that are fueling investments.

In our latest report on Innovation Challenges faced by Sports Organizations we’ve broken down the three key sources of new capital coming into sports. Link to the full article below but here’s a quick summary

• Institutional Investor Interest Growing: The list of PE / VC funds that have invested heavily in Sports & Sports Tech is growing rapidly. Arctos Sports Partners, 777 Partners, CVC Partners, Redbird Capital, Fenway Sports Group, Clearlake Capital, Sixth Street Partners are just some of the large PE funds heavily investing in sports. The key here is that PE, unlike growth focused VC capital, is looking for healthy, sustainable, profit generating businesses. Something sports leagues (the evolution of PSR in the premier league for example) are taking note of.

• Rise of Middle Eastern Investors: From Football to Golf, Tennis to Boxing, pick a sport and it seems like a gulf state is hosting a major event. The UAE set this precedent over many years, then Qatar and finally the Saudis have taken over. Access to this kind of capital brings genuine disruption in sports, look at PGA-LIV and potentially a revamped Tennis calendar. The question around longevity remain but at least for now, sports is clearly a big part of the investment strategy for the region.

• Big Tech is Big on Sports: In the last 2 years, Apple has made its interest in sports clear. Signing a 10-year landmark deal with the MLS, using NBA use cases for the Apple Vision Pro launch, they even launched a dedicated sports app. And they are not alone. Meta (investing in VR based streaming), Amazon (live streaming NFL, NBA, Premier League Champions League and more in different regions), Netflix (NFL on Christmas Day next season + WWE) & Google (now paying $2 billion annually for NFL Sunday Ticket rights) have increased their investment in sports. Alongside Microsoft (legacy partnerships with LaLiga), IBM (AI commentary), Samsung (immersive screens) and numerous other legacy tech companies. Big tech is in Big Time!

More details in the full article.

The main message is fairly simple, as more capital comes into sports from multiple sources, the trickle down effect will see a chunk of it coming down to the startups / scaleups as the need for innovation grows. Just have to hold on till then.

SportsTech Connect: Berlin

​Last call! We’re hosting an exclusive event with limited places, bringing together key stakeholders driving innovation in the sports ecosystem. 6:30 pm onwards on Friday, 12th July 2024.

Yup It’s tonight so if you're in the city and interested to join, please drop us an email and we’ll send you an invite.

Top News from the World of Sports Tech

💪🏽 University of Notre Dame became the first collegiate organization to participate in the Comcast NBCU Sports Tech accelerator program.

💪🏽 The OpenAI Startup Fund and Thrive Global announced the creation of a new company, Thrive AI Health, exclusively devoted to building a hyper personalized AI health coach.

🧘 BrainLit and the NBA’s Memphis Grizzlies announced a partnership for a new biocentric light to enhance athlete and staff performance and recovery. 

🏀 The International Basketball Federation (FIBA) Equipment & Venue Centre has granted approval to Pixellot, a market leader in AI based video and data solutions, for its automated video solutions. 

🏎️ NASCAR unveiled a prototype electric race car as part of a new initiative that aims to reduce the organization’s emissions and electrify aspects of the sport.

⚽ Cosm with FOX Sports announced plans to showcase the CONMEBOL Copa América 2024 third-place and final match broadcasts at Cosm’s new 65,000 square-foot experiential venue in Los Angeles’ Hollywood Park.

🚀 French sporting goods retailer Decathlon, launched a new subsidiary, Decathlon Pulse, dedicated to build, invest in and acquire innovative businesses.

Money Talks:

💰 Gymdesk, a member management software for fitness businesses, raised a $32.5 million growth round from Five Elms Capital, a software investment firm. 

💰 Recast, a micropayment monetisation platform for streamed media, closed $5 million in a funding round led by US-based venture capital firm Morpheus Ventures.

💰 NY Based metaverse technology company, Infinite Reality raised $350 million at a valuation of $5.1 billion. 

🤝 Infinite Reality acquired game developer Landvault for $450 million. they have been on an acquisition spree this year, spending over $800 million in stock on various companies, including The Drone Racing League ($250 million), Ethereal Engine ($75 million), Action Face ($10 million), and Stakes ($8 million).

🤝Caesars Entertainment acquired sports betting tech firm, ZeroFlucs Group to enhance its same-game parlay (SGP) offerings, for an undisclosed amount.

🤝 Tower Studios' arcade-style football game series Sociable Soccer was acquired by Sporty Group, for an undisclosed amount.

🤝 R-GOL, multi-brand distributor of football merchandise, acquired a majority stake in sportbm, a Polish developer of software for the management of clubs and sports academies, for an undisclosed amount.

🤝 Paramount Global, the parent company of CBS Sports, has signed an agreement to merge with Skydance Media in a deal worth US$8.4 billion.

🤝 GameAbove Sports, a sports-focused business development and strategic investment entity, announced the purchase of the fourth BIG3 franchise with plans to base the team in Detroit. 

Global Sports Tech Ecosystem Report 2024!

📢 Have you read the full Global SportsTech Ecosystem Report 2024 yet?

An investment overview and trend analysis of 3 geographies - North America, Europe & Asia-Pacific; along with the top Innovators & Startups.

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