Sapphire Ventures, the venture capital firm with $2.5 billion assets under management, has launched a $115 million sports fund targeted at early stage startups. Sapphire has previously invested in such big names as 23andMe, Box, and Fitbit.
The fund, called Sapphire Sport, is Sapphire’s first dedicated sports fund and its first fund ever focused on early stage startups (Series A and Series B).
Sapphire Sport promises to spur collaboration between the VC and and a number of leading sports, media and entertainment brands, including major league team owners from the NFL, the NBA, the NHL, MLB, and MLS, and brands such as Adidas and the Sinclair Broadcast Group.
The fund’s anchor investor is City Football Group, which owns the English Premier League’s Manchester City. Other professional franchises represented in the fund include the Boston Bruins, via owner Jeremy Jacobs, the Indiana Pacers, New York Jets, San Francisco 49ers, San Jose Sharks, and the Tampa Bay Lightning, via owner Jeff Vinik. Major League Baseball has invested as well.
The fund launched with five startups in its portfolio spanning fitness to gaming and streaming. Tonal is a digital fitness company. Mycujoo is a live soccer streaming platform. Overtime is a next-generation digital sports network. Fevo is a social commerce company. And Phoenix Labs is a gaming studio.
The fund is co-managed by Sapphire Ventures co-founder and partner Doug Higgins and Michael Spirito, who said in a recent interview with SportTechie that they were launching the fund to help fuel the massive industry growth across sports and tangential industries. According to Higgins, some of the most attractive areas of focus will be esports, digital fitness, predictive analytics, fan engagement and betting.
“We think of sport as this global unifying concept. It’s fandom. It’s engagement. It’s community. It’s everything that envelops sport. So if you look at what that market opportunity is as an investor, it’s more than vast enough to come in and add value as a technology investor,” said Spirito. “We’ve seen this gap in the investment cycle, a proliferation of early-stage, seed fund and accelerators that are investing in a more sports tech manner. As a Series A and B investor, when we look at the sports universe we’re looking at every single vertical that touches sport from a customer base standpoint.”
Higgins said Sapphire has differentiated itself by filling the gap between the startups at a seed and incubator stage and those at much later stages. Due to its lengthy experience as a technology investor in Silicon Valley, he believes Sapphire brings a differentiated approach to the sports tech world. The fund, he said, won’t look at one-off products, but rather focus on technology companies that could have broader technological implications both in and outside the sports world.
“The difference between us and incumbents is we’re technology first investors,” said Higgins. “We’ve had a pretty established history of investing in technology companies and we feel that has a lot of applications here. The technologies we feel are going to win ultimately aren’t necessarily going to be a product just focused on stadium technology, for example.”
To hit that point home, Sapphire underlined portfolio company Fevo, which is developing new payment solutions that could eventually touch the way people pay for concessions at stadiums. The company didn’t launch with intentions to infiltrate the sports industry, but nevertheless found early success there.
“The good news it’s a hot space. The bad news is it becomes a crowded space and a lot of investment capital has come into this space,” said Higgins. “But that’s why it’s important that we make sure the history of Sapphire is identified here: because we’ve seen this movie before.”