March 13, 2024
More than 1,000 major financial deals struck during 2023 had some sports technology element, according to research from investment bank Drake Star Partners, generating more than US$37 billion in value.
The quarterly study also takes into account deals which include technology elements or are sports technology adjacent.
For example, the US$27 billion figure it recorded in mergers and acquisitions (M&A) includes Endeavor’s US$9.3 billion takeover of WWE. However, Drake Star says its findings offer a snapshot of an industry in rude health that is outperforming other sectors.
Indeed, the headline figure of US$37 billion recorded over the 12-month period is significantly more than the US$21 billion witnessed in 2022. The amount was boosted by several Q4 deals, including Better Collective’s US$188 million takeover of digital sports media platform Playmaker Capital, as well as major funding rounds from the likes of Urban Sports Club (US$100 million) and Strikerz Inc (US$40 million).
Investments in early-stage companies continue to account for the majority of private deals (625 of 796), with wearable tech specialists generating the most value (39 per cent of US$5.7 billion). The largest funding round of the year, however, was Chinese esports company VSPO, which raised US$265 million in February last year.
After a challenging few years for the wider technology industry, and startups especially, Drake Star believes the conditions are ripe for sports tech investments to continue to thrive. It noted that US$7 billion had been raised by funds with an interest in the sector, which could boost private financings, as well as several major transactions either completed or in the works.
These include DraftKings’ US$750 million takeover of Jackpocket, Charterhouse’s US$315 million acquisition of Bruin Capital’s majority stake in Two Circles, and the planned merger between Reliance Industries and Disney’s broadcast properties in India.
Drake Star also believes investments in mid and late-stage companies will grow in 2024 amid more realistic valuations, with artificial intelligence (AI), ticketing and venue management considered to be strong areas of activity.
Drake Star also noted a more positive outlook for initial public offerings (IPO) and speculates several IPO-ready sports technology firms were looking to go public once again now there is a more favourable investment climate.
