SportsTech Skyrockets in 2021
Investment crosses $5b in 1st half of 2021, sets record
We’re well over halfway into 2021 and there’s been plenty of excitement in the sports world already. The Euros could hardly have been better, the Olympics are finally here to tell wonderful stories and as the new season of European Football draws near, perhaps the most exciting news is that some stadiums will be back to full capacity! All this while cruising in space has become the favourite sport of billionaires. These truly are fun times.
Though it seems like they weren’t the only ones reaching astronomical heights. Back here on earth, SportsTech investors are doing their best impression of another billionaire Oprah Winfrey, only with funding instead of cars. Our ecosystem reports (Europe, North America and Asia Pacific) highlighted that 2020 wasn’t nearly as bad as expected and that 2021 had gotten off to a good start. That good start has quickly evolved into a record setting year and we’re only 6 months in.
Investment crosses all-time high in 6 months of 2021
As you can see, the total investment in SportsTech startups until June 2021 has already crossed $5b, surpassing the total amount invested in any of the last 5 years. In fact it has crossed the total amount invested in any year ever! At least since 2000, from we’ve been recording this data and we’re pretty sure it will cover any previous year as well.
As mentioned in last year’s VC report, SportsTech investment has usually followed a pattern of high and lows. So after a low in 2019 followed the previous record in 2018, much was expected from 2020. And though the pandemic affected things significantly, it was still a very strong year. Now it seems like the high we were expecting has finally arrived in 2021 and we still have half a year left to see where the peak actually is.
So what’s fueled this rocket ship? After taking a closer look at the data, here are our 3 key takeaways
1. Good time to bet big
Till June, SportsTech has already seen a record setting 14 $100m+ funding rounds in 2021. For context, 2018 saw the previous highest with 11 and in 2020 that number was 10. Scale has always been a question mark for SportsTech but it appears investors are now confident that there is enough headroom for more unicorns to emerge, thereby justifying the big ticket investments at valuations that they are betting will rise even further. It is no coincidence that SPACs (Special Purpose Acquisition Company) have been in the news so much recently, providing investors and founders with multiple routes to IPOs and exits. Average deal size of $33.7m and Median of $4.5m are at unprecedented levels, another indicator of this bullish investor sentiment.
2. The hot getting hotter
Digital Fitness. NFTs. Betting & Fantasy Sports (In the US and India respectively). Even the most savvy investors can’t avoid a bit of FOMO when it comes to the hottest trends in sports and innovation. Digital Fitness has already graduated to becoming a macro growth driver with multiple sub-sectors creating waves of their own, be it Connected Fitness Devices (Fiture, Tonal, Tempo), Sleep & Recovery (Oura) or Trainer services (Lenus). NFTs might not be buzzing as much as it was at the start of 2021 but there is still plenty happening in the space (Dapper Labs, Animoca Brands, Sorare). And in India, we’re watching fantasy wars 2.0 between the big guns (Dream 11, MPL) who themselves will be eagerly watching the sports betting market develop in the US.
By the way, each of the companies named in brackets raised a $50m+ round in 2021 and 11 more did the same. Welcome to the big time.
3. A global phenomenon
When it comes to investment, the US still holds onto its title as the top SportsTech nation. But not as tightly as in previous years. Over $2b have been invested into US based startups so far in 2021 and that is a significant amount. But 3 other countries have already crossed the $500m mark — China, India and for the first time, Canada. The UK, who are also having their biggest investment year to date, rounds out the top 5. Ranking the cities by investment, San Francisco has taken over the top spot from the incumbent New York City and we have two new entries in the top 10 — Sao Paulo and Toronto. All these are incredibly encouraging signs for the global ecosystem, indicating that SportsTech is growing in multiple places simultaneously.
Time for lift off?
If there were any question marks over the impact of the pandemic on Sports, the last 9 months have clearly shown us that innovation holds the key to that answer. SportsTech ended really strong in 2020 and has really taken off in 2021. Is this the time the industry slowly makes the shift from ‘still a bit niche’ to ‘proper mainstream’? We’re curious to see what the rest of the year brings but the momentum is certainly already there.
Athletes and Fans have bigger expectations from their sports experiences and the pressure is on organisations to deliver. From the looks of it, the investors are playing their part. Now it’s up to the founders and companies to execute. Mercury rising indeed.
Rohn Malhotra is a Co-Founder at Berlin based SportsTechX — Data & insights about SportsTech startups and the surrounding ecosystem. You can get in touch via LinkedIn or email.
