Where VCs Are Placing Their Bets in the Sports Tech Industry

SportTechie attended several major sports technology and analytics conferences in the first half of 2018, including the San Francisco 49ers’ Innovation and Business Strategy Conference in May and Hashtag Sports in June. While venture capitalists tended to have varying opinions regarding the investment landscape, a few key themes consistently popped up: esports, gambling and streaming—all rapidly-evolving and growing markets in sports tech. Youth sports and digital fitness rounded out the top five. Here we summarize some of the conversations from those meetings, detailing the key areas of growth where investors are focusing their interest.

At the 49ers’ Innovation and Business Strategy Conference at Levi’s Stadium, Sapphire Ventures Managing Director Doug Higgins said that his company’s first investment of 2018 was not only in esports, but marked Sapphire’s first-ever investment in gaming. In February, the VC firm led a Series B funding round for Phoenix Labs, a gaming studio that recently launched its debut PC title, Dauntless. As of the announcement in February, the closed-beta of the role-playing game had amassed more than 850,000 gamers.

Sapphire is also looking at digital fitness, fan engagement and data management, performance analytics and team management, youth sports, augmented reality and virtual reality, next-gen media, and sports betting/daily fantasy sports, according to Higgins.

Mark Wan, the managing partner of sports media and tech investment company Causeway Media Partners, also said that esports and gaming was a key area of interest for his company. Causeway is additionally looking at sports content providers, video streaming technology, sports betting and fantasy sports, youth sports, and fitness and training technologies.

A few weeks later at Hashtag Sports, Causeway Media director Jasmine Robinson said her firm is “hugely bullish on the streaming space.”

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Time Warner Investments, meanwhile, is interested in later-stage tech companies that it can inject with funding to accelerate growth. At Hashtag Sports, Time Warner Investments Senior Vice President Allison Goldberg said the company has spent “a long time looking at esports, as both a publisher of games and league operator.” Time Warner-owned Turner Sports runs the ELeague, a professional esports league based on the multiplayer first-person shooter game Counter-Strike: Global Offensive. The ELeague airs on mainstream TV channels such as TBS.

Time Warner Investments is also interested in artificial intelligence and machine learning, particularly when it comes to automated video production. A number of companies are working on ways to use AI to produce automated video, including Keemotion, IBM via Watson, and WSC Sports., though Time Warner Investments has not helped finance any of those efforts.

Colin Neville, a management director at Raine Group, said the merchant bank’s main areas of focus right now are sports data, particularly as it relates to athlete performance, and the enhancement of media, including in over-the-top streaming services. Raine Group is also looking to increase its investments in China and India, where the sports industry is being increasingly professionalized, he said.

Additionally, Neville says Raine is focused on sports betting, particularly as that relates to OTT streaming. When asked whether he predicts there will be future content channels tailored specifically to sports betting, Neville was emphatic: “Yes.”

“I’m sure every major media company that has a sports presence will create assets dedicated to sports gambling,” he said.

Read more: sporttechie.com

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