2023: Funding low but M&A at all-time high

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Final push to get the next SportsTech VC Report out next week so we’ve decided to give you a little preview in this newsletter. Seems like 2023 hasn’t been as disappointing a year for SportsTech as has previously seemed.

This edition also includes the announcement of the 3 finalists for the 1st edition of our SportsTechX Startup Spotlight.

While we had a jury in place to assess the shortlisted companies, we also tested out our proprietary Startup Scoring algorithm and were quite happy with the results. More on that in the new year.

Add ‘Startup Competition Jury’ to the list of jobs AI threatens to replace.

Happy Reading

Feature Article: VC Report Teaser

2023: Funding low but M&A at all-time high

We’re almost there now, our new report will be out next week. So we figured, why not a little preview. 

Here’s our main 5 year funding chart: Funding Amounts & Number of Rounds 2019 – 23.

This time we also added the Mergers & Acquisitions amount per year. And there’s a reason for it.

Looking at the funding number, estimated to top out at around $2 billion, it’s easy to call 2023 a disappointing investment year for SportsTech. It is the lowest since we started tracking this data.

Across sectors, there has been a clear slowdown in investment activity post the post-pandemic boom. Without going into the well documented reasons, we wondered how to talk about a year where not much really happened. But then we asked ourselves, what really happened? The numbers delivered the answer.

Yes, 2023 will be the lowest funding year since 2014. Conversely, 2023 will be the highest year ever for Mergers & Acquisitions activity, crossing $12b by our year end estimate.

That suggests it wasn’t that there was no money to go around, it was simply being routed differently. 

In fact, combining the Investment and M&A activity, 2023 takes second place only to the record shattering 2021. Given that the 2 pillars are almost mirrors of each other, we’re christening 2023 as the much needed ‘Year of Consolidation’ in SportsTech.

Startups that raised big rounds in 2021 and 2022 have either been forced into bridge / down rounds to survive. And those who couldn’t have been forced to find an early exit. A situation that bigger players have been able to take advantage of.  

Challenging times for some founders and investors. But these moments can serve as a catalyst for innovation and resilience, leading to a more robust and sustainable SportsTech industry in the future. A saying about omelettes and eggs comes to mind.

More to come in the report.

Data disclaimer: Our data cut off for the report is Oct 31. We’ve extrapolated the actual numbers to our end of year estimates, which incorporate a 25% reporting lag buffer for funding amounts and 15% for M&A.

SportsTechX Startup Spotlight Finalists

We’re down to three.

Leading up to our upcoming SportsTech VC Report, we decided pretty late to run a startup competition, offering a Free Feature in the VC Report+ other media coverage to a startup in our network.

Since it’s the first edition and we already had enough on our plate, we intentionally kept it fairly quiet. Only pushing out requests for applications through this newsletter. Yet nearly 100 applications from 20+ countries came in.

Were plenty of high quality applications so bringing that list down to 3 was a tough task but one we managed to get done. Helped by our own proprietary Startup Scoring algorithm. More on that to come. 

For now, here are the Final 3:

FanBlock: Own a piece of your favourite team’s digital pitch.

Why we like them: An cool application of Web3 tech to connect digital and IRL worlds. Started with AC Milan, with more big name teams to follow.

Flowstate: Automated video capture for surfers.

Why we like them: Computer Vision tech making waves (couldn’t help it) in new sports. Solid traction in a short span of time.

Mingle Sport: Solution to manage grassroots football teams, to track performance & share video content.

Why we like them: A really rich product solving a core problem for a wide audience.

Congratulations to all the startups! The winner will be announced in the VC Report.

Top News from the World of SportsTech

 NASCAR has struck a $7.7 billion media rights deals with Fox, NBC, Warner Bros and, for the first time ever, Amazon who will exclusively stream five races. 

More from Amazon, who are apparently interested in picking up rights to NBA playoff games.

 Speaking of the NBA, they have a new game on Roblox, NBA Playground. 

 SportBusiness’ Global Media Report 2023 has valued global sports media rights a record high of almost $56 billion, up just a bit from $54.7 billion in 2022. They were $44 billion in 2020.

MLB, F1 and the Mercedes F1 racing team’s lawyers will all be busy as they face fraud suits from FTX investors for promoting the now defunct cryptocurrency exchange platform. As will a certain CR7’s, though his problematic association was with Binance.

A new SportsTech Startup Accelerator in Frisco, by Silicon Valley-based Plug and Play.

Money Talks:

Hamburg based Sport Alliance, a leading software company in the fitness industry, announced a $100 million investment from PSG Equity.

 Australian sports and esports betting company Picklebethas raised AUD 15 million (~£7.94m) in a Series A financing round.

Leading Direct-to-Consumer Sports Platform, Hang Media, whose award-winning HANG platform has drawn more than 22 million young viewers to interactively experience sports events raised $9.2 million.

Brazilian Radar Fit, the innovative health and wellness application announced a $1 million investment from WE Ventures.

Eindhoven-based urban sports app CityLegends announced a €1 million seed round.

Latest from our Channels

 #188 Cartan Capital – Fueling the Future of Sports and Health

In today’s episode we are joined by Cici Bellis⁠, Founder and General Partner of Cartan Capital, a venture capital firm focused on the sports and health technology sectors. On this episode CiCi talks about her unique background as a professional tennis player, her foray into venture capital and her journey of founding her own VC firm Cartan Capital. Watch the full video here. 

 STX Weekly:  Breaking down Formula 1’s rising valuations.

 STX Clips: Gary Kirsten recounts his story of how he secured India’s Head Coaching position. 

Podcast Thursday Throwback

 #152 Rooter – Interviewing Piyush Kumar, CEO of Rooter. Rooter is India’s leading Game Streaming and eSports platform. The company is on a mission to provide a fair and inspiring platform to gaming content creators, helping them produce entertaining content that is unique to their personas while benefiting from monetizable opportunities for their efforts. Watch the full video here. 

 #151 Frontrunner– Interviewing Neil Zhang, Co-Founder of Frontrunner

Frontrunner is a A decentralized sports prediction market built on blockchain. Frontrunner is a decentralized sports prediction market where users can buy shares of sports propositions and trade them like they would stocks or options. Watch the full video here. 

All our podcasts are now available as Vodcasts on our YouTube channel. We will be publishing new episodes and back catalogue from the year simultaneously so there’s plenty to watch.

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