Breaking Down Sports Tech

It has been nearly five weeks since the conclusion of the 2016 Rio Olympic and Paralympic Games, a period of time showcasing 15,000+ athletes from 200+ nations competing in a combined 800+ events across 30+ sports held at 30+ athletic venues.  Along with over 3.5 billion people worldwide, we at Top Tier cheered with excitement in times of triumphant victories and were empathetic in times of defeat. We watched countless awe-inspiring performances and followed incredible individual journeys as these athletes entered the Games with dreams of standing on top of the podium.

This particular Summer Olympic Games was one for the record books.  We saw the highest number of athletes representing the most nations ever.  These athletes competed in the most stadium venues and were viewed by the highest global audience ever, both in person and through various forms of media.  With this thought in mind, Top Tier wondered how these three particular areas in sport – AthleteAudience, and Athletic Venue – are transformed with the use of technological innovation. We wanted to see how the intersection of sport and technology converge within our own venture portfolio and within the companies we are actively tracking. To accomplish this, we extracted companies deemed “Sports Tech” for the following analysis:

Sports Tech Companies

Athlete of Tomorrow can be defined by any company that is providing a product or service to enhance an Athlete’s performance and/or safety in competition. In this defined group, we saw wearables companies using data taken from sensors to track performance (FitbitAthosHalo Neuroscience), help prevent injury (Heddoko), as well as provide better informed wellness decisions (Kenzen). There were also virtual reality based companies designed to help an athlete better prepare and become more mindful during training or prior to competition (STRIVR). We look at companies in this field as progressing the modern athlete and fine-tuning human performance.

Next-Gen Fan can be defined by any company that can enhance enjoyment of live sport broadcast for the Audience while not physically being present at the event. Companies in this group include sports digital media publishers (SB NationFloSports) along with daily fantasy services (DraftKingsFanDuel). We also are seeing virtual reality present with content providers aimed at providing real-time, 360 degree viewing experiences for live events (NextVRLiveLike). These technologies improve the overall fan experience, both from in the home and on the go.

Future Arena can be defined by any company that is intended to heighten the impact of live viewing experiences inside the Athletic Venue. Companies in this group include mobile ticket providers (SeatGeekGametimeLivement), location-based engagement platform (HYP3R), and real-time merchandise solution services (Sidestep). Despite infrastructural constraints of a venue, fans will expect experiences at live sporting events to be more efficient and enjoyable.

After looking at these companies from these three lenses, we took a step back to see how these companies would be defined from a “non-sports”, sector-specific angle. The most prevalent areas we are seeing in “Sports Tech” are Software/Analytics, IoT/Hardware, Digital Media, and Virtual Reality. These sectors highlight recent trends we have seen in the fundraising market amongst our various venture capitalists.

Sports Tech Sector Mapping

We have also seen more “Sports Tech” companies being formed in the past few years. Taking a look at the chart below, we can see that 63% of “Sports Tech” companies have been formed after 2011. As sensors have become commoditized, wearables have become more prevalent. In the past few years we have also seen more virtual reality based companies being formed as the hardware (head mounted displays) are now productized and available for consumption.

Sports Tech Founding Years

This analysis has been informative on several fronts. We now have a better understanding of which specific areas of innovation are influencing the world of sports. These three areas that make up sport – AthleteAudience, and Athletic Venue – are being innovated by ambitious founders across multiple sectors.  As sports fans here at Top Tier, we are encouraged by the vertically integrated companies that are being created in “Sports Tech”.  These companies showcase that the emotional attraction to sport, combined with a technology-driven ecosystem will continue to foster companies that enliven the fan’s experience, sharpen the competitor’s edge, and keep all of us on the edge of our seats.

Note: This data represents a small percentage of the portfolio funds and underlying portfolio companies in which the Top Tier Funds have invested.  Additional detail regarding the portfolios of the Top Tier Funds and their respective performance is available upon request. The data in this presentation is obtained from sources believed to be accurate and reliable. However, Top Tier Capital Partners does not guarantee the accuracy, adequacy, completeness or availability of the data and is not responsible for any errors or omissions in it or for the results obtained from its use.