SPORTS TECH 2024 OUTLOOK: SOCCER EDITION

In the past few weeks, I have conducted over a dozen video calls with CEOs and Founders of sports tech companies and some VCs. The focus of these conversations was on what to expect in the space in this new year. Here are the four key takeaways from the chats:

1. Artificial Intelligence: From Concept to Having a Real Impact
2. Performance Analysis: From B2B to B2C, with a Focus on Athlete Development
3. Athlete Investing to Keep Growing
4. Consolidation, Driven by Platform Abundance and Funding Scarcity

Artificial Intelligence Starts Being Ubiquitous

There are seven main areas that - in the medium term - will be directly impacted by AI in football, as I mentioned in a personal blog post published in August : 1) Scouting; 2) Match Analysis; 3) Personalized Training <> Injury Prevention; 4) Assisted Refereeing; 5) Ticketing; 6) Fan Engagement; 7) The Convergence of Real and Virtual Careers. In 2024, AI will likely start to have a real impact on at least two of those seven areas: scouting and ticketing.

Regarding scouting, I expect more tools like Soccerment’s AIDA (AI Data Analyst), capable of providing complete reports about players in a few seconds. The PRO version of AIDA, not yet released, has shown incredible results on the scouting front, impressing even our (picky) data scientists. [seconds before I clicked "publish" for this post, I saw this article talking about the partnership between Sevilla and IBM , which validates my point, I guess].

I personally view AI in match analysis as potentially the most transformative application for the Beautiful Game. In a few years, I expect AI assistants to suggest formations and tactical changes in a highly counterintuitive manner, substantially challenging our existing biases, like it happened with the Move 37 of AlphaGo ("In Game Two, the Google machine made a move that no human ever would. And it was beautiful"). However, for this to work properly and to become a reality, significant advancements are needed in merging event data with tracking data.

Another area I expect to start being significantly impacted by AI is ticketing, with improved dynamic pricing, including for the secondary market.

Performance Analysis: From B2B to B2C, with a Focus on Athlete Development

B2B in football is challenging and not particularly lucrative, at least directly. Most clubs spend the bulk of their money on footballers and try to minimize other expenses by leveraging their brands. On the other hand, B2C is far from easy; quite the opposite. A substantial amount of money is needed for marketing and - especially for innovative products - the public is not always ready, resulting in a niche market.

However, I believe that this is about to change. The validation of a tech-driven analytical approach by football clubs (think of FC Liverpool, Man City, Brighton, Brentford, AZ Alkmaar, and others) is beginning to be emulated by non-professionals, who represent 99.9% of the entire football market. To reach them, automation is needed, i.e., scalability of solutions without compromising data quality. The traditional trade-off between the two is likely to be resolved thanks to AI.

In my conversations, it became clear that the real potential of data analytics lies in its ability to support the development of young athletes. Predictive analytics, in my opinion, will be more crucial in youth football than in the elite sector, optimizing athlete development and recruitment.

Athlete Investing to Keep Growing

Athlete investments have significantly increased in recent years. Funds like Lionel Messi's PlayTime.vc , Blaise Matuidi 's Origins , syndicates like Skin In The Game , and angel investments by the likes of Mario G?tze , Zlatan Ibrahimovic, and others exemplify this trend (very good article by Profluence on this topic here ). I expect the number of athlete investors to rise markedly in 2024. The reason is simple: it's a win-win situation. Athletes become brand ambassadors for the companies they invest in, boosting brand value and creating a virtuous cycle of mutual benefit. This trend is particularly advantageous for companies engaged in B2C. We're experiencing this firsthand with our deal with Federico Dimarco of Inter Milan.

Partnerships & Consolidation

According to the Global Sportstech VC report 2023 by SportsTechX ,2023 was the “Year of Consolidation” in the industry, with M&A deals worth $11.6bn, a 3.6x increase y/y. Although that's a remarkable figure, I believe that this year will be equally, if not more, intense in terms of consolidation.

The reasons are twofold:

1. Funding Scarcity: SportsTech startup funding, which amounted to a mere $2.3bn in 2023 (down 73% y/y), will hopefully rebound in 2024. However, it's unlikely to return to the levels of 2021-22, given the changing interest rate scenario.
2. Platform Abundance: In sports, especially football, there's insufficient time and human capital to manage numerous platforms. Teams at all levels would prefer a single platform for everything from performance analysis to training management.

A supportive funding environment could resolve the second issue through well-thought-out partnerships. However, due to funding scarcity, a more profound wave of consolidation seems more likely. The main hurdles to this are the high valuations achieved in the US during the 2021-2022 investment rounds and, in Europe, founders' deep attachment to their creations. As startups struggle to raise funds or face downrounds, these hurdles may become less daunting.

Final Thoughts

2024 promises to be an intriguing year. How is Soccerment approaching it?

• AI: After starting to build an “AI integration” team at the end of 2023, we'll continue integrating AI into everything we do, from our products and services (e.g. xvalue.ai ) to our internal processes.
• B2C & Player Development: As XSEED gains popularity among young athletes, we're refining benchmarks for athletic and technical stats across different ages, setting the stage for predictive analytics.
• Athlete Investors: We're attracting more interest from elite players who, understanding our budget constraints, are willing to become ambassadors through equity investments and data analytics support.
• Partnerships and M&A: When it comes to partnerships and consolidation, we will try to be as open-minded as possible, recognizing that a more unified and efficient sports analytics market will foster faster growth.

If you are involved in the sports tech arena and would like to exchange a few ideas on the space, or anything else, feel free to DM me!