Overview of the California SportsTech landscape
eSports dominates the exploding investment environment in the Golden State
The United States is the global leader in SportsTech, based on number of startups, major success stories, investment figures and a range of other factors. So it was obvious to us that we were going to have a closer look at some of the main hubs. California, with the Silicon Valley as a hotspot for tech and entrepreneurship in general and Los Angeles as the unofficial capital of eSports in the US (home to Activision, Blizzard and Riot Games) was an easy pick to start with.
Here are some facts to show the relevance of California in North American SportsTech: Regarding amount of investment, it has 3 cities in the top 4 (in 2018). Regarding amount of startups, California has 2 cities in the top 3. It’s no surprise that San Francisco is leading from a state perspective in both rankings, and is only topped by New York City on a North American level. For details see our North American SportsTech Report from earlier this year.
Let’s have a look at initiatives in the Californian ecosystem: There is currently no accelerator or incubator program (besides Sports Tech Tokyo by Scrum Ventures operating out of San Francisco and having its World Demo Day in town) and there are only a few events available: Later this year San Francisco will have the “Future Innovation Sports Tech (F.I.S.T.) Global Series” in town (November 8th) and the San Francisco Venture Sports Community (SFVSC) has set up a high class circle of thought leaders in sports and digital who meet regularly. So there is room for more, also from a location perspective, as it seems that all major initiatives are taking place in San Francisco.
When it comes to the investment side of things, California has a good offering of sports focused investors with Causeway Media Partners (Palo Alto), Elysian Park Ventures (Los Angeles), MotionVF (Del Mar) and Sapphire Ventures (Palo Alto). Contrary to the other initiatives none of them are based in San Francisco.
But now it’s time to look at some SportsTech companies.
We have screened companies all around the world and analyzed them according to our SportsTech Framework and a variety of other factors. For this specific article we went through around 500 California based companies that are listed in our global SportsTech database, to make sure they are active and to identify the best ones. We went for both funded and unfunded companies who were founded in 2009 or later. Over 300 startups & scaleups made it into the final overview.
Startups & Scaleups
California has a broad variety of startups and scaleups in all major SportsTech sectors, including lots of exciting ones that are worth highlighting. To showcase what California has to offer, we decided to go for a mix of objective and subjective picks.
Here are the 5 most funded SportsTech companies
Discord ($280mn) — All-in-one voice and text chat for gamers that’s free, secure, and works on both your desktop and phone.
Zwift ($165mn) — The at home training app connecting cyclists around the world.
Caffeine ($146mn) — Caffeine is a new way for friends to enjoy and create live gaming, entertainment, and creative arts broadcasts.
NextVR ($116mn) — Exclusive access to sports, music and entertainment immersive experiences in virtual reality.
AllTrails ($77mn) — AllTrails helps people explore the outdoors with the largest collection of detailed, hand-curated trail maps as well as trail reviews and photos.
And here are 5 SportsTech companies we want to highlight
Second Spectrum — Machine intelligence to find and share video, discover key insights, and be more informed. Also creates personalized, interactive, augmented content and experiences. Official Optical Tracking Provider of the NBA.
Tonal — The world’s most intelligent fitness system. It’s an entire gym and personal trainer right on your wall. Riding on the Peloton-wave of convenient home workout and recently secured a $45mn funding.
Zenrez — CRM and growth marketing automation for fitness studios. Powered by big data.
Want to see more SportsTech companies from California or all around the world? Our SportsTech database is the place to visit!
We’ve seen an explosion in SportsTech investment in California in 2018, increasing by 278% over 2017. This is due to big investment rounds by Discord ($150mn and $50mn), Caffeine ($100mn and $46mn) and Zwift ($120mn). Discord had big rounds in all of the last three years, even though 2017 was slightly weaker for SportsTech in California.
The view on the sectors of investment over the last three years is very interesting. With half of all money invested into Californian SportsTech companies, eSports is clearly driving the industry. Activity & Performance is a strong follow-up, while Management & Discovery solutions can only account for 3% of total investment. We start to understand why Gen.G built a 13,000-square-foot esports training facility in Los Angeles…
Not the worst place to be ;)
California did not disappoint us. Lots of great companies to explore, a more than healthy investment environment and an ecosystem that covers the basics but still has room for more. You hardly find a more attractive region, if at all. We were surprised by the dominance of eSports and that “Fans & Media” and “Management & Organisation” only account for 18% of the investment over the last 3 years, especially as California (and Los Angeles in particular) is so well known for its entertainment industry. But at least we have the content platforms Religion of Sports (Tom Brady) and Uninterrupted (LeBron James) with celebrity involvement :) For startups it must be convenient to have a range of high class sports teams in the backyard, who are open to innovation topics and collaboration (Golden State Warriors, San Francisco 49ers, Los Angeles Clippers, etc.). So as a summary there’s only one thing to say: California is definitely one of the major SportsTech hubs in the world!