The Technology Bets that are Transforming the Sports Industry Today

What are the common experiences to which everyone — like, every single person — can relate? The ultimate connective tissue between you and any random stranger you may encounter.

There's the local weather, food you like to eat, and, in some form or fashion — sports. Maybe you played a sport growing up, you or your friends or family are a fan of a team, your son or daughter plays a sport or their friends do, you keep an eye on the former classmate who qualified for a national team, your coworker tells you about their fantasy team or bets — the total addressable market for sports can really be, well, just about every human on the planet.

And in the past couple of decades the scale and opportunity for the business of sports reached a new echelon, a new era where startups and entrepreneurs attracted the attention of investors who had previously not thought of sports as a ticket to the massive returns venture capital seeks. There's never been a better time to have big, innovative ideas in the greater sports industry.

Wayne Kimmel, Managing Partner of sports-focused venture capital firm SeventySix Capital, is one of the leaders helping to foster this dynamic period in the sports industry. Listen to Kimmel speak and you can feel the energy he has for ambitious ideas and individuals. It's why Kimmel and SeventySix have supported, and continue to fund, businesses that want to do big things in the ever-changing and ever-growing field of sports.

"We started thinking about [bringing venture capital to sports] and we're like, ‘Wow,’" said Kimmel. "Every person in the world falls into one of these buckets. You may hate sports and you may be the biggest orchestra fan in the world and you never watch a game or anything, but then when your granddaughter's out there on that gymnastics mat, you're focused, right? You're like, 'Oh my God. Or you're your grandson is playing baseball or your son's the star on a basketball team or something like that — all of a sudden that is your life and that's where you're going to spend a lot of money.

"So we see all that [and] we're like, Well, this is a world that we want to be in and we started looking around, like, who are the investors? Who's backing the entrepreneurs who are using technology, using data, using analytics to make it better? There's not a lot of us, and there still aren't a lot of us out there investing across this right now. But it's such a big opportunity and the dollars around and in this multi-trillion dollar sports media entertainment industry is big and getting bigger every single day.”

Kimmel recognized the opportunity certainly got bigger on a day in 2018 that will remain immortalized in US sports — the day the 'PASPA' law was struck down, opening the pathway for states around the country to legalize sports betting. In my interview with him, Kimmel recounted how he took action right away, knowing the time was ripe for companies to capitalize on this new opportunity to engage and activare sports fans, as well as buttress the burgeoning sports wagering industry. SeventySix supported the growth of the Vegas Stats and Information Network (VSiN), which had the grandiose vision to become the CNBC of sports betting (they largely have). Kimmel also came into contact with Matt Holt, who saw a need in sports betting that someone would have to cover and had the ambition that Kimmel so embraces. I'll let him tell the story.

"We wanted to get behind entrepreneurs who want to do the big thing in the present right now, we constantly still want to look at entrepreneurs, we still want to get behind entrepreneurs who are pushing things forward and doing the next thing...," said Kimmel, who founded SeventySix Capital in 1999. "One day,(VSiN founder and CEO) Brian Musburger introduced me to Matt Holt, who's the CEO of IC360 now. [IC360] is the company that makes sure that everything's on the up and up across the whole sports betting industry today.

"Matt was a host at VSiN at the time and doing some other things, and he comes off [the air] and says to me,’ I'm going to start this company. It's going to be an integrity business to make sure that everything's on the up and up across sports betting — every single operator, every single regulator, every single team, every single league, every single conference is going to be my client. And I'm like, 'Matt, I've heard entrepreneurs talk like this before, but you don't need everybody. You can just get a small percentage of them and we'll be pretty successful.' He goes, ‘No, we're getting everybody.’ Well, you know what? He's done it."

Not only do issues like competitive and statistical integrity scale across the entire sports ecosystem, but the performance side of sports can also penetrate every level — from the multi-millionaire GOAT to the rec league warrior to the peewees and preteens. So it makes sense that Kimmel and SeventySix Capital also have eyes on tech that can help the athletes themselves. There is a democratization in technology now, where nearly everybody has internet access and a connected mobile device, and that universal access increasingly applies to the latest and greatest tech in sports performance. Because businesses recognize there is demand and amateur athletes are increasingly willing and wanting to get this tech for themselves or their kids. Kimmel elaborated on this trend, where Little Leaguers can feel like their MLB heroes when it comes to optimizing performance.

"What's cool about all this is that not only is this something that can happen with the professional players in major league dugouts, we're able to now bring this down to anywhere USA, any field for any kid who's playing baseball, softball or whatever sport it is," said Kimmel. "They're getting the opportunity to be able to have the same kind of tech, and that will only mean that these games will get better. It will enable the kids themselves to be better players, have more confidence, have more fun...It could change a kid's life by just enabling them to do that.

"Are they going to go to the major leagues? Probably not. But you know what? They may be a fan for life. And that's a big deal for MLB and some of these other major leagues who are really looking to build fans for life.”

It's hard not to be energized speaking with Kimmel, envisioning (and bringing to fruition) the grandest vision of ideas and businesses in the greater sports space. It's a testament to the ambition that accompanies venture capital and the near-universal nature of sports and gaming and the engagement around it all. There's another SeventySix company Kimmel discussed that embodies those ideals, and which sort of pivoted their way to a product that every consumer brand can utilize — Lucra Sports. You may know Lucra as the technology now powering the peer-to-peer gaming for Dave & Buster's. Kimmel explained that that direction is limitless, and Lucra is just getting started.

"Now we're going to expand that even further...," he said. "[Lucra] went out as really a pretty special peer-to-peer sports gaming business, but now is the technology platform for major brands and what they're doing from a gaming perspective and enabling these major brands to unlock the gaming and competitive piece of their business is just brilliant...Hopefully, very soon, you'll be hearing about some other massive brands that are starting to bring this whole gaming mechanic into their experience."

The capitalization and innovation in sports is just getting started, too. If the rate of pitches and opportunities that Kimmel and SeventySix Capital encounter is any indication, the next decades of the sports industry will be as dynamic and awe-some as these past couple. There are more talented entrepreneurs with more ambitious ideas than ever — and, now, the investors and support to bring them to life.

"We see a ton of entrepreneurs. I mean it's upwards of 170 new opportunities that come in the door every single month, from all over the world," Kimmel told me. "It's amazing to think about all the entrepreneurs, all the innovation that are trying to figure out what's the next thing across sports, media, entertainment, and we're thrilled to take a look at all this stuff, try to figure out how we can be part of it and do more.

"We want to do more and more. We're constantly trying to get behind more of these incredible entrepreneurs who are trying to make it all happen. That's what it's all about."

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LISTEN TO THE FULL INTERVIEW WITH WAYNE KIMMEL

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