An Emerging Investment Asset Class: Pro Athletes
With Bitcoin and the crypto market sky-rocketing to what could be a new all-time high, we were interested in exploring the alternative investments around sports: not team ownership, but rather investing in individual professional athletes. A new set of startups are drastically innovating how “fan investors” can now tap into future earnings of their favorite athletes.
Why?
When not bankrolled by corporate sponsors, some amateur & pro athletes bear the brunt of expenses relating to travel, tournaments, and training. In Profleunce’s breakdown of amateur tennis pro Kiranpal Pannu’s expenses:
2022 Season:
+ $6,770 Prize money
+ $10,000 Coaching
- $9,500 Hotels
- $5,000 training
- $20,000 in flights
= ($17,730) Net Loss
While approximately only 3% of tennis players earn on court prize money, the real money is actually in endorsements.
Tech startups like FANtium, Vestible, and Big League Advantage allow players to get a cash advance in exchange for a % of future tennis, football, and MLB earnings - respectively.
Similarly, athlete-like stock market platforms PredictionStrike & Mojo allow users to invest in the “stock” of particular athletes - essentially the Robinhood of sports.
MLB Superstar Fernando Tatis Jr. was the model business case for Big League Advantage
Signed a $340M contract with the San Diego Padres
~$30M went to the company because he took a six-figure lump sum as a teenager in the minor leagues
Weekly Startup Spotlight
Like stocks & crypto, what if you could invest in a new alternative asset class - professional athletes? You finally can:
Carry - If you have dreams of becoming a pro golfer, this might be your golden ticket! Presenting Carry, a unique platform used to raise funds for “early-stage” golf professionals where investors receive a percentage of future winnings. Founded by Donnie Dotson, he had a vision to help up-and-coming golfers with financial runway while simultaneously bringing serious golf fans closer to the action. Pivoting away from the retail investor model towards connecting corporate sponsors to rising stars, Carry has financed $800K+ in funding for 18 pro golfers from 350+ investors.
Founder: Donnie Dotson
Funding: Raised $600K in angel investment in 2021, and has raised subsequent funding from an undisclosed set of investors
NILLY - College athletics fandom just got taken to another level. For as little as $1,000, accredited investors can now invest into pools of NIL (Name, Image, & Likeness) from college athletes. NILLY uses the funds to secure NIL rights by offering an upfront cash license payment to student athletes, and investors are able to participate in up to 25% of future star’s NIL earnings. The founding team is composed of Edly (a student-loan focused fintech company) executives and NBA Champion Kendrick Perkins - who is responsible for bringing college-athletes onto the platform.
Founders: Chris Ricciardi, Kendrick Perkins
Funding: Undisclosed, NILLY spun out as an affiliate of Edly Advisors LLC., a Registered Investment Advisor and an education-focused fintech company specializing in student loans
Sports-Tech Market Activity: Investors & Deals
Accelerators/Incubators
StatusPro, a VR sports gaming developer, was selected for Disney Accelerator’s 2024 class (Feb. 26th)
Will participate in demo day at The Walt Disney Studios lot in Burbank this spring [SBJ]
Relay Ventures has partnered with Future of Sport Lab (FSL), a sports tech incubator, and will commit funding for select companies in each of FSL’s class (Feb. 29th)
Mentorship, programming, and demo opportunities from Maple Leaf Sports and Entertainment exec and TMU’s Ted Rogers School of Management [SBJ]
Venture Capital
Vibe.co, a streaming TV advertising company dedicated to helping SMB’s, raises $22.5M in Series A funding (Mar. 1st)
tvScientific, a platform dedicated to helping advertisers buy/execute ads for connected TV, raised $9.4M (Feb. 28th)
Investment was led by S4S Ventures, BDMI, and Progress Ventures; other investors include NBCU/Comcast, Norwest Capital Partners, and Hearst Ventures [FinSMEs]
Tuned, a digital hearing health company working directly with employers, raised a $3.2M in seed extension (Feb. 25th)
Growing its commercial team and hiring audiologists to expand its business to more employers
Investment led by Unum Group; other investors include Distributed Ventures [FinSMEs]
GlycanAge, a healthtech company that analyzes biomarkers in clients’ blood to determine biological age and measures to slow aging, raised $4.2M in seed funding (Feb. 27th)
Navigating regulation & commercializing for a broad range of consumers
Investment led by Kadmos Capital and LauncHub Ventures [Athletech News]
M&A and Investments
Warner Bros. Discovery are no longer in talks to acquire Paramount Global, despite buzz of a possible merger (Feb. 27th)
Possibility of partnership but Skydance Media are still in talks of acquiring Paramount [SBJ]
Josh Harris and David Blitzer are nearing sale of their ~5% minority stake in the Steelers to an existing investor group led by Art Rooney and Thomas Tull (Feb. 28th)
Sale is required due to NFL rules mandating that a majority owner (Josh Harris of the Commanders) cannot hold any interest in another NFL franchise [SBJ]
Reliance, one of the largest media platforms in India, along with its portfolio company Viacom18, are merging with Disney’s Indian media businesses for $8.5B (Feb. 28th)
GameSquare, a vertically-integrated entertainment tech company focused on gaming, sells Complexity Gaming, a leading esports organization, to Complexity’s founders for ~$10.4M (Mar. 1st)
Photo Creds: Sports Illustrated’s piece on Josh Harris selling Steeler’s stake.
Strategic Ventures
USADA and Epicore Biosystems, biotech company with a strong history in sports science, are partnering to explore the use of sweat collect for PED screening of athletes (Feb. 27th)
Transitioning from blood and urine testing to a much less invasive screening method [SBJ]
PGA Tour joins The Coalition for Responsible Sports Betting Advertising, agreeing to its guidelines for sportsbook advertising (Feb. 27th)
Joins Major leagues coalition of NFL, NBA, MLB, NHL, NASCAR, MLS, and others [SBJ]
Arena Group, publisher of Sports Illustrated, is exploring an SI-branded TV channel (Feb. 27th)
Aiming to position a potential “SITV” to be aired on major cable operators [SBJ]
Samsung unveils their new Galaxy Ring, a smart ring that measure key health metrics for wearers (Feb. 27th)
Health metrics include heart rate, sleep patterns, respiratory rate, and more [Athletech News]
MVPInteractive, a developer of a customer engagement platform using AR/VR technology, launched AllPass, a web solution for internal ticketing solutions for sports teams (Feb. 29th)
Tracks ticketing requests for executives, players, and coaches while offering the ability to make hotel arrangements for away games [SBJ]
Sportradar, a B2B tech solutions platform enabling next-gen engagement in sports, will provide augmented streaming to sportsbook partners for the ATP tour (Mar. 1st)
In-depth stats such as ball composition, speed and directionality, over the course of each tennis match [SBJ]
Lawsuits
iFIT, a leading manufacturer of interactive fitness equipment, settles a lawsuit filed by Dish over infringement on Dish’s patented streaming technology (Feb. 26th)
Dish had also sued Peloton for infringement last year; Peloton was ordered to pay Dish $75M in a one-time settlement last May [Athletech News]
Nevada State Education Association is planning on suing a recent Senate Bill that will allocate $380M to building a new stadium on the Las Vegas Strip for the current Oakland A’s (Feb. 26th)
Claims the building of the stadium as unconstitutional for causing “irreparable harm” to the city [FOS]
Therabody, a recover technology company known for its Theragun, is suing competitor Hyperice for defamation and trade libel (Feb. 27th)
Claims that Hyperice published a false press release that disparaged the quality of the company’s products and copying Hyperice [SBJ]
Job Board & Opportunities: Week March 4th
Every week, the job board is personally curated for openings that are not widely posted. Spanning business development to software engineering and everything in between - entry level jobs to senior leadership - here’s to those looking for new opportunities in 2024: