NEW YORK — The areas of sports and technology stretch far and wide, from virtual reality and wearables to sports science, esports and venue-related technology. What’s the one segment, though, that venture capitalists and investment firms are currently hesitant about?
Deepen Parikh, Partner at Courtside Ventures (CourtsideVC), spoke at the first annual Columbia Sports Conference on Saturday, hosted by the Business School at Columbia University and the Sports Business Association.
On his panel titled “Investing in the World of Sports,” Parikh and the other two participants were asked about their “likes” and “dislikes” in investment areas at the intersection of sports and technology.
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According to Parikh, when he and his partners at CourtsideVC — which has invested in the Drone Racing League and LiveLike, for example — started analyzing early-stage sports media and technology companies, they realized that “sports tech is not necessarily the most investable asset class out there.”
“Sports is a subset of media. At the end of the day, if you’re trying to build an early-stage company that only sells to teams, you probably have a very small limited market. In the U.S. alone, you’re talking about 160 some odd teams. Let’s say you’re a phenomenal early-stage tech company and you have 10 to 20 percent penetration rate, that’s still a fairly small business. The way we look at investing in sports is sports is a vertical or angle, but it isn’t the entire business.”
Additionally, Parikh said that the area of sports and technology where CourtsideVC has been weary of is wearables.
“Something that’s obviously been really talked about and where we’ve had some reservations around is the wearable industry. I think there’s a huge opportunity, and there’s a lot of data out there. Our concern is that there’s too much data out there. People are trying to collect a lot of information that probably won’t get too much use. Yet, it’s nifty to have some really crazy data points if you’re an elite athlete.”
Parikh said the early-stage venture fund generally steers clear of products that are only utilized by elite athletes or if they are — citing Catapult Sports — that it is at a high price point and “almost required among all of these professional sports teams and elite athletes to train.”
Given the rise of wearable use by professional athletes and teams — like WHOOP, Catapult Sports, Blast Motion and others — it’ll be interesting to follow not only new products that potentially enter the market but also if new money is raised for current wearable companies in sports and the accuracy of such company’s data, a pressing topic of discussion in sports as well.
Inaugural @CUSportsConf at @Columbia
⚽️ ‘Investing in the World of Sports’ panel – @BarryKlarberg, @deepenparikh & #SalGalatioto #csc2017 pic.twitter.com/mMRiv98p5S
— CUSportsBiz (@CU_SPS_Sports) March 25, 2017
