Sports Aren’t Just Games – They’re Smart Investments

We are at the center of a “perfect storm,” an opportunity that does not come very often. I believe that in a few years time, we will ask ourselves: how did we leverage this opportunity, did we build something valuable, did we play to win or did we stay on the couch watching, paralyzing by analyzing?

Sports tech may sound like a niche, but it’s big business, and that business is growing significantly. Deloitte estimates the sports industry to be worth $700 billion worldwide by this year’s end. However, much more is happening in sports than wins, losses, selling tickets and negotiating broadcast deals.

As a kid, I played football from dawn to dusk, watched every game possible on television, and couldn’t get enough of my favorite sport.

Through the years, I’ve established companies and was fortunate enough to have invested in a few. But I recently returned to my first love: sports.

Connecting my two passions – innovation and sports – excites me and I believe, it will excite you, the savvy investor, too.

 Hottest Investment Trends:

According to SportPro Media, sports tech will grow by 22.4% by 2024 . Based on that statistic I project that approximately $10 billion will be invested worldwide in 2019 in sports technology, with this figure rising to $13 billion in 2020.

 Why is sports technology exploding in growth?

Whether we’re sitting in a stadium seat, gazing at the television from our sofa, training for a triathlon, or drafting a baseball-fantasy team – whatever the activity, we demand more from our sports experiences.

 In a nutshell – these are the main factors in sports that are being transformed:

 ·       New generation of users – millennials are consuming sports differently-- they have 3 screens open: LeBron’s twitter, Youtube and group chats open with friends to share the excitement of the last play- it’s a social event from home

·       Social media is overwhelmingly changing the way consumers consume sports. imagine you have a Warriors fan in California and in India- those fans can connect and create a friendship spanning 10k miles based on a common ground

·       New emerging segments – eSports, VR, Blockchain, AI- the list keeps growing as innovative developments continue to flourish

·       Internet shopping- the underlying foundation of sports retail and the easiest way to get your favorite player’s jersey without the hassle of waiting in line

 Yes, there are some sports tech unicorns:

•  Peloton (2012, NY) – the company that is reinventing fitness is now worth more than $4B
• DraftKings (2012, Boston) - daily fantasy sports, raised $650M, $1.5B valuation
• Dream11 (2012, Mumbai) - Fantasy Sports company out of India, raised $100M, $1B valuation
• Zwift (2012, California) – This company saw the huge potential in eSports, and what started as a simulator for cycling training purposes, raised $120M in Series B last December, creating a new and very physical eSports game.
• Sportradar (2000, Norway) – The giant sports live-data provider, that was valued in more than $2.5B, and that’s even before new betting regulations in

 The next place to look for UNICORNS:

From the last HYPE survey, these are the hottest topics for investment in: Esports, Sports Betting, Fan Engagement, Media and Digital Platforms, VR, Data Analytics, Smart Stadiums and Clubs, Blockchain in Sports.

Through hundreds of great companies, we see every year through our HYPE ecosystem, I can mention few that got my attention and one which is now in HYPE Capital’s investment portfolio:

•      FanAI (2016, American)- artificial intelligence monetizes sports teams’ digital audience;
•       Fun With Balls (2016, German)- gets kids active through sports tech
• Anzu.io (2017, Israeli)- non-intrusively injects virtual advertisements in e-sports.
•   Kinexon, (2012, German)- places motion sensors in athletes’ uniforms – including in the NBA – and even in the balls used; 

 There are a lot of people who understand that times have changed and there’s money to be made. I believe, that we’re just at the dawn of the sports technology revolution. My metaphor for this phenomenon is popcorn – yes, the snack food enjoyed at every American sports arena and stadium. You put popcorn (the investment in sports tech) in a hot pan, wait just a bit and … POP! The kernels pop and continue popping.

 Dig in, there’s plenty of popcorn for all of us.

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Amir Raveh is the Founder and President of HYPE Sports Innovation, a venture-capital fund, and the world’s largest global Sports accelerator network. Amir@HypeSportsInnovation.com.