Here is what a recent report says about opportunities for startups in Sports Technology in Europe. With 1500 startups and 900 new investment deals, it is safe to say that the field is vast and possibilities in the sector are booming.
What is a SportsTech startup? How are these startups funded ? What makes investors want to back them? The answer lies in two concepts: products and people. After SportsTech expert, Benjamin Penkert interviewed six investors for his European SportsTech Report 2019, a common response occurred upon asking them, “How do you choose to invest?” All investors agree that they only invest in opportunities that, in their opinion, deliver value. However, this idea of value can vary from investor to investor. When a startup is in the initial stages, investors typically contribute their money based on the management and the team behind the product. If the team seems to be 100% committed, the investors provide funding. The other approach is product-focused. This occurs during the later stages of the startup when the growth potential and visibility of a product is more tangible. Investors look for products that will improve experiences, earn revenue, and improve playing conditions for the industry.
Investment in the SportsTech industry saw major growth from the previous year. In 2017, 285.6 million euros were invested compared to 363.9 million in 2018. This surge in investment, combined with fewer rounds, shows that the SportsTech industry is moving towards growth and expansion.
With this large influx of capital and the pure potential of Europe’s startup scene, many countries battle to be the hub for innovation in Europe. The leading frontrunners in this competition remain The United Kingdom, France, and Germany as they remain ahead in both investment capital and startups. See below for a breakdown of funding by city.
The SportsTech industry could be divided into four categories, according to experts. After analyzing companies based on their funding, stakeholders, and target audiences, four main themes were found to drive further analysis for a report prepared by SportsTech expert, Benjamin Penkert. According to Benjamin, the SportsTech industry can be broken down into the following four categories:
- Activity and Performance innovations are ones that track physical performance either before, during, or after the activity. They generally include actual equipment, trackers, and wearables. For instance, Dynostics is a German-based company which measures smart performance and analyzes metabolic rates. Another example could be Runnin’ City is a French-based company which helps individuals to explore the city while running.
- Management and Discovery technology offers users platforms to manage organisations, venues, leagues and events. It assists people in finding other sportsmen, coaches, and athletes in buying products and services. Examples of these products are tickets to sporting games and trips to multi-day tournaments. One example of this is GainChanger, a German-based company that offers entertainment data through AI. Another example is Globatalent, a UK-based company that supports transparent funding of sports endeavors through blockchain technology.
- Fans and Media provide social outlets for fan engagement which strengthen team branding and follower connections to the team as well as each other. They encourage community development among these individuals with similar interests. A startup called FanAxn brings community members together about free-to-play betting games while Kinexon tracks real-time location and senses motion.
- eSports covers any concept relating to video games, online/virtual teams, and betting on outcomes. For example, JOIN is a French-based platform that optimizes esports media campaigns, and Patron is German-based tool used to empower esports communities.
The field of SportsTech is continuously evolving and changing. Now, more than ever, consumers of sports media have a variety of platforms at their disposal to fully invest themselves in the content they want to consume. There are multiple ways to interact with one another purely based on similar interests. The startup culture of SportsTech encourages innovation and movement within the industry. With Activity and Performance currently having the most number of startups, Management and Discovery reflecting more traditional structures, and Fans and Media attracting the most amount of investment capital, the future of SportsTech can really land anywhere. Ben’s expert opinion states, “Well, in all of [the categories] we’ll see lots of new startups. I expect the trend towards a healthy lifestyle to continue, so my guess would be everything fitness-related, across all sub-sectors of ‘Activity & Performance.’”
Find the full SportsTech report here: ESTR19