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Study: Sports tech startups raise US$1.6bn in Q2 as M&As reach US$14.5bn

Drake Star Capital expects a steady flow of investments in second half of 2023.

15 August 2023 Steve McCaskill
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  • Up to US$6bn raised for future investments in sport and media
  • Esports, fantasy and betting most popular segments

A report by investment bank Drake Star Capital says a “healthy fundraising climate” helped sports technology firms raise US$1.6 billion in private funding during the second quarter of 2023 with mergers and acquisitions (M&As) reaching US$14.5 billion.

The figures take into account investments made with both sports technology and sports technology-adjacent firms, such as those in the broadcasting, betting and gaming sectors.

More than three quarters of the private investments were for early-stage companies but there were notable investments in mid-to-late-stage companies.

French pay-TV giant Canal+ invested US$200 million in Asian streaming service Viu, Tonal raised US$130 million in Series F financing, while sports media and tech firm FZ Sports raised US$74 million.

Looking further ahead, almost US$6 billion in new funds were established with the purpose of making sports and media investments. Drake Star says the most active seed stage investors were Elysian Park, Courtside VC and Thirty Five Ventures.

Esports, fantasy and betting accounted for the greatest volume of deals, while media and broadcasting accounted for the greatest value.

Public funding reached US$1.3 billion, headlined by betting and gaming specialist Entain’s US$785 million raise on the open markets.

The headline M&A figure was boosted by Endeavor’s blockbuster US$9.3 billion merger of the Ultimate Fighting Championship (UFC) with WWE, but even when this was taken into account there was still US$5.2 billion worth of confirmed transactions.

Going forward, Drake Star expects to see a significant flow of investments in a “highly active” sports technology market – especially given the presence of several major funds looking to make moves in the sector. Areas expected to attract significant attention include fan engagement, artificial intelligence (AI), ticketing and venue management.

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