A Global Overview of SportsTech
Comparing the major SportsTech markets: Europe, North America & Asia
So, 2020 has been quite a year already hasn’t it? It started with the tragic demise of two icons of modern sports in David Stern and Kobe Bryant. And around that time there was a virus going around that few knew would change the world as we know it, at least for the foreseeable future.
But instead of another article discussing the impact of this pesky pandemic, I’d prefer to focus on what Team SportsTechX has been up to the last few months, and in fairness, it has been quite a lot. For starters, we published 3 brand spanking new reports covering the major SportsTech markets: Europe, North America and our first-ever Asian SportsTech Report. Up next, we run a digital event series in May called SportsTech Radar where in 90 mins we focus on key insights, talk to the experts and showcase some cool startups from each region. And in the meantime brushed up on our cooking skills, so all-in-all not too bad.
This post though is all about comparing the insights we gathered from each of the ecosystem overviews. So let’s take a quick look at all three of them side by side to see what happened in the world of SportsTech in 2019.
Note: This article does not include any countries from Oceania, South America or Africa in the analysis.
First, the Key Takeaways
Clearly your perspective on SportsTech in 2019 had a lot to do with which region you call home. 2019 set an all-time high in Europe, with investment more than doubling over the 2014–2019 period analysed. On the other hand, North America saw a 5 year low in 2019, after a record-setting 2018. We also saw this trend of big highs followed by steep lows in Asia, though the overall growth there seemed pretty steady over the entire period.
When it comes to investment, New York still reigns supreme as the SportsTech capital of the world accounting for nearly half of the investment in the USA and 22% in the world! London and Beijing solidified their claims as the leading SportsTech cities for their respective regions.
The results are a bit different when it comes to the number of startups though, the UK still leads the way in Europe while California is the major innovation hub in the US. And it seems like the growing sports focus in India is manifesting itself in more solutions entering the market.
And that’s just the appetiser, there’s plenty more to dig in to.
US & Canada in top 5, India ranks 3rd globally
Looking at the Top 15 countries side by side for the number of SportsTech startups they are home to paints a fair picture of what is happening in the ecosystem. The US is clearly the most developed market but Canada also makes it into the top 5 underlining the dominance of North America. Among the US states, California leads the way accounting for 30% of all startups, a big difference to New York which accounts for 13%.
The UK is clearly the biggest market in Europe, alone accounting for more than France, Germany and Spain combined. Asia is a similar story with India clearly the leading nation for SportsTech startups in the region and in the top 3 globally. China and Israel the only other Asian countries in the top 15.
Slowdown in 2019 after record-breaking 2018
As mentioned earlier, 2019 behaved differently in different regions. For Europe it was a breakout year, seeing the highest investment made in a single year in SportsTech for the region. Europe also nearly doubled it’s contribution to the global SportsTech funding, from 13% overall to 23% in 2019.
North America and Asia saw corrections in their respective markets after record-setting highs in 2018, a trend that we also saw in 2017 after the breakout year that was 2016. Median investment sizes seemed to grow at a steady pace overall and the Average investment size in 2019 showed that while investors cut fewer cheques in the year, they weren’t afraid of cutting big ones.
So will 2020 follow a similar trend? Well pre-Covid-19 indicators were strong as there were quite a few deals closed in Jan and Feb of 2020. Here are the biggest we’ve seen so far:
- Fitness aggregator ClassPass raised $285m
- Content aggregator Barstool Sports raised $163m
- Original sports content platform The Athletic raised $50m
- Global sports content aggregator Minute Media raised $40m
- Sleep tracking wearable Oura raised $28m
That said, it is almost certain that this trend will not continue in 2020, though we do hope to see a resumption of deal-making towards the end of the year as things slowly open up.
New York the global capital, 3 Chinese cities in top 5
We saw this already in the Global SportsTech VC Report published in Oct last year, New York is indeed the Global Capital for SportsTech, nearly double its nearest competitor in Beijing and alone accounting for 22% of total investments globally. No one is taking a bite out of this apple just yet.
But while the US is lopsided, investment in China definitely seems more evenly spread with 3 cities in the top 5. Wuhan and Guangzhou make it in as home to 2 of the biggest funded esports streaming platforms in Douyu TV and Huya respectively.
London and Bangalore break the US-Chinese dominance of the top 10 coming in at 8th and 9th respectively. Both those cities are also the top cities for startups in their respective regions showing some correlation between their status as startup and investment hubs in the region.
Fans & Content the top-funded sector
Breaking down the total investment by sectors is always interesting as it directly showcases where investors like to put their money to work. And it is pretty clear that applications that provide services or content to fans are at the forefront with Fans & Content the top funded sector by far.
SportsTechX has been long talking about a Fitness-Content-Esports trifecta which has dominated the investment conversation for the last few years and that is also in evidence looking at the top-funded companies in each sub-sector. 5 out of these 8 companies would fall under the Fitness-Content-Esports umbrella, with only BigLeagueAdvance (analytics), SeatGeek (fan experience) and DraftKings (fantasy sports) the outliers.
Only one Non-American company in this 8 though, will this trend change? Unlikely to happen anytime soon as investment in SportsTech enters the mainstream conversation in the US, especially now with betting a major investment driver as well. Though in time we do expect some more companies to scale pretty quickly, most likely out of China.
So what’s next?
Well for now, of course, it is hard to say. No modern-day Nostradamus can claim to know when we will return to some sense of normalcy or even what this new normal would look like. The pandemic has impacted each one of us in a number of ways, mostly bad but some good as well. The environment isn’t complaining, for starters.
There is also growing momentum to the conversation around competitive Sports returning to our lives pretty soon. The WWE and UFC have already adapted to empty arenas, and major sports leagues like the MLB and Bundesliga are likely to follow suit pretty soon with all the others exploring similar similar models. As sports fans, this is exciting to hear but at the same time, we all hope that this rush to fill up airwaves doesn’t do more harm than good.
That said, apart from taking the necessary precautions, there is little we can do but wait this period out. For now, at least I have his Airness to keep me company. Certainly every Monday I know I will ask myself, is it time to dance yet?
Rohn Malhotra is a Co-Founder at Berlin based SportsTechX — the leading data & insights provider about all things SportsTech. You can get in touch with him via LinkedIn, Twitter or email.
