5 Reasons Why NOW is the time to invest in SportsTech Startups!
Reading Time: 4 Min.
5 Reasons Why YOU Should Invest in Sports Tech Startups NOW:
This past week, I met with one of my old friends – regarded as one of the most successful investors with over 20 years of experience at the top of the industry.
Under his belt are some of the most-renowned unicorns that we all like to name drop!
He has been investing in everything that moves, from new technologies to listed & private companies, startups, and more. He gave me a private session, and explained to me why he believes NOW is the best time to invest only in startups!
With inspiration from what I learned – here are 5 reasons why now IS the right time to invest in the sportstech market!
Which of these points do you agree/disagree with the most? Let us know in the comments below.
1. Invest today in the unicorns that will IPO 5 years from now –
Past Recessions Have Bred Unicorns: Economic downturns and recessions have historically been some of the best times to found (and invest in) startups.
Some of the largest global companies, including Airbnb, Uber, Slack, WhatsApp, Instagram, and many others, were all founded during the Great Recession.
Fighting against the uncertainty of the future, these hard times help startups to demonstrate exceptional resilience against financial chaos which further lures in VCs and private investors who are looking for the right opportunity to invest.
Apart from acting as a breeding ground for up-and-coming unicorns, recessions also provide a golden opportunity for VCs to buy high-quality, early-stage startups at discounted valuations.
- Sports Tech is continuing to grow at a rapid pace (166% valuation increase from last year) –
When it comes to creating brand new experiences for the fans, top brands and leagues today are tapping into gripping solutions like Artificial Intelligence, Mixed Reality, Virtual Reality, etc. For example, NFL giants Baltimore Ravens recently teamed up with HYPE alumni ImagineAR for augmented reality activation and engagement partnership. With sporting content becoming as diverse as the mind can possibly imagine, the scope to execute profound innovation, imagination and thinking-outside-the-box mentality has never been wider and of value.
While Web3 remains to be the talk of the town today, the curiosity and the demand for technologies like data and analytics, broadcast innovation, betting and fantasy sports, and the in-venue experience in sports will continue to grow exponentially – which in return, will inject more investments into the industry.
3. Recession? – Invest While The Iron’s Hot:
What sets most of the leading VCs apart from the rest is their risk-taking ability to identify growth potential of distinct startups for the long run during scary and uncertain times.
Market for investments in startups is generally fragile and high-risk by nature but it is no rocket science for investors to grasp that the best time to financially back a startup is when its valuation is at an ever-low cost.
With most of the investors pulling back from the market during recession, startups tend to suffer valuation declines which presents once-in-a-lifetime buying opportunities for daring VCs to invest in them at a discounted valuation.
4. Sports Tech Investments Continue To Surge:
Compared to other traditional sectors, sports tech is relatively a new market where the rewards for high risk-takers are up for grabs. The industry is still growing in terms of investment so it is highly believed that there is no better time than now to tap into the sports tech market, amid the resurgence of the expected recession in 2022.
In 2021 alone, more than $12.7 billion was invested in sport technology firms making it a record-breaking year for the industry. While looking beyond the past and the present, the sports tech sector is estimated to be worth over $31 billion by 2024, which is likely to catch the eyes of more than a few VCs and investors who are not investing in the industry currently.
Many investors have already been attracted by a predicted compound annual growth rate of 17.5% from 2021 to 2026, and they are likely to be followed by several leading VCs as well as private investors who now consider the sports tech industry as a goldmine that prints money.
5. Ever-rising demand for new emerging technologies in sports
Top tier sports organizations are actively exploring new ways to create meaningful experiences for and with fans – and most of them would agree that “immersive” style is the right way forward.
NFTs were the breakout sports tech trend of 2021, while the Metaverse is defining 2022 for the most part. Meta (previously Facebook) and Mark Zuckerberg are betting on the “new chapter of the internet” with the purpose to lead the metaverse movement with total conviction.
Assuming the highly anticipated Apple glasses and mixed reality headset are introduced before the turn of the year, one could expect a drastically meaningful shift in adoption of metaversal solutions.
These were 5 of the big reasons why we fell today is a great time to invest in sportstech contrary to the downturn in the market.
Finding key themes and can’t-miss opportunities in the market is one of the core activities of the Investment team at HYPE S.I.
If you are an investor interested in the top up-and-coming sports tech solutions and the Web 3.0 revolution, reach out to our VP of Investments & Strategy here -> Pini Listenberg.
Stay tuned for more.
Research: Daniel Rabinowitz , Ashish Thakur