Editor’s Note: Christine Magee is an editor for CrunchBase.
From wearable activity trackers to fantasy e-sports, technology is transforming the way athletes train for the game and fans engage with their teams.
With all of this momentum VCs are swinging for the fences. Investors have spent over $1 billion in venture deals for sports-related startups over the past year — and everyone wants in on the action.
Last week, the LA Dodgers launched the Dodgers Accelerator, a 12-week program in partnership with R/GA that will kick off this summer. They’re looking for startups “at the intersection of sports, technology and entertainment” — an intentionally ambiguous definition, according to Stephen Plumlee, Managing Partner of R/GA Ventures.
“That includes everything from fan engagement, to smart venues, to sports performance, to youth sports. And things like VR content and virtual season tickets, too,” says Plumlee.
The technology the Dodgers use is by no means revolutionary from a Silicon Valley perspective. Until now, the team’s technological claim to fame was installing MLB’s largest wi-fi system in Dodger Stadium for the 2013 season.
Now they’re looking to position themselves at the forefront of sports tech innovation through the accelerator program; which Dodgers CFO Tucker Kain says the club decided to launch after noticing an influx of capital and activity in the space.
The numbers back him up. Venture funding for sports tech startups hit an all-time high of $927 million in 2014, growing nearly 30% year over year since 2012. In the first few weeks of April alone, investors committed $151 million in venture funding for sports tech companies — that’s over half the quarterly funding high of $299 million, recorded in Q3 of last year.
With the rise in total venture funding has come a rise in athlete investors. Carmelo Anthony and Steve Nash both run their own venture funds, and the relatively stealthy venture arm of Major League Baseball reportedly participated in a Series A round for Shots, the Justin Bieber-backed selfie app, earlier this week.
“Every professional athlete looks at the tools they have available, and the way that analytics are transforming their preparation for games, and now they’re realizing that they have a front-row seat for the changing landscape of sports,” says Miles Clements of Accel.
Accel’s two funding rounds for live event ticketing startup SeatGeek saw participation from professional athlete investors Peyton and Eli Manning, Shane Battier, and Mike Dunleavy, Jr., among others. Most recently, Clements led Accel’s $73 million Series A investment for video coaching tools platform Hudl.
“What Hudl does is essentially allow a little league team to use an iPad to capture game film and share it across devices for a really low cost, and that sports analytics experience used to be a service that was reserved exclusively for the professionals,” says Clements.
Clements compares the way Hudl is democratizing the youth sports market to the way that lynda.com transformed education and Etsy transformed retail. But youth sports is only one small subset of a massive sports market.
“Sports tech is really all-encompassing — initially you think sports is sort of a niche leisure activity, but the annual spend across all sports consumption is $145 billion,” says Clements.
“These are really big communities, and we see some of the most respected brands in sports recognizing that they need to form digital connections to their consumers,” he says.
Under Armour, for instance, spent a lofty $560 million to acquire fitness trackers MyFitnessPal and Endomondo in February.
“It feels like there’s an insatiable appetite for sports and sports-related content — in the networks, the amount of money going into sports programming has tripled, on massive numbers, and if you look at Twitter, 60% of traffic is sports-related,” says Ryan Moore of Atlas Venture.
Atlas has a sports tech portfolio that includes fantasy gaming site DraftKings, Lego-like toy maker OYO Sportstoys, sports fan social network Fancred, and mobile video analysis app Ubersense, which was picked up by Hudl last year.
Moore says he’s especially excited about improving the in-game experience.
“There’s been so much investment for the person on the couch, but now the scales have tipped a little bit and we have a major attendance problem — the cost of live entertainment is starting to price out the average fan, and now a large focus for these teams is creating a more engaging live experience,” Moore says.